Digital connectivity in an innovative joint distribution system with real-time demand update

Abstract

A joint distribution system based on digital connectivity to share logistics resources constitutes an innovative method of intelligent logistics. In general, O2O deliverymen are subjected to delivery capacity imbalances in different hours—peak hours and off-peak hours in particular—throughout the day. To solve the insufficient capacity problem in peak hours and the idle capacity problem in off-peak hours of O2O deliverymen, this paper introduces an innovative digital connectivity enabled B2C and O2O joint distribution system. In this system, all pickup and delivery nodes of both B2C and O2O orders are interconnected through the Physical Internet. In response to the dynamic arrivals of O2O orders, this paper develops a center dispatching system to collect and schedule the real-time logistics information via digital connectivity. An improved savings algorithm is proposed to support the real-time routing optimization of deliverymen. By making a comparative analysis with the traditional separate distribution mode, this paper proves the effectiveness of the joint distribution system. Results show that it outputs better optimization with larger order sizes, the same B2C and O2O order proportions as well as longer lengths of O2O time window. With the benefit of the digital connectivity, the joint distribution system contributes to providing real-time logistics services with high efficiency and reducing carbon emissions to realize sustainability. The prospect of this system exhibits the potential for use in richly varied delivery services, most notably meal delivery in urban areas.