Comparison of four mechanisms for request exchange in collaborative transportation

Abstract

AbstractThis paper presents frameworks for auction‐based and posted price mechanisms for exchanging requests between carriers operating in the same geographical areas. Similar mechanisms have been studied before in a rather isolated manner. In this work, all mechanisms are tested within the same scenario and by comparing their results; the aim is to obtain insights regarding the efficiency gains they offer to the network and the required information for their application. Moreover, this comparison provides a clear idea of what is needed to implement each mechanism and the results to expect if one invests in the mentioned implementation, i.e., how much would the net profit be affected. The mechanisms' main objective is to give carriers the chance to improve their original sets of requests in order to increase their overall efficiency. Due to the nature of routing problems, requests usually have different costs for different carriers, depending on the location of the depots as well as on the requests that have to be serviced. The exchange mechanism should find a new allocation such that carriers obtain requests with higher value (i.e., lower cost) for them. Results obtained here show that individual auction‐based mechanisms provide similar results, on average, to centralized auction‐based mechanisms, both outperforming posted price mechanisms. Nevertheless, this improvement difference comes at the cost of providing more information (included in the carriers' bids). Readers can use the presented comparison and results to improve decisions taken prior to collaboration, specifically deciding which mechanism is the best option for a specific situation.