Abstract

In the management of intermodal transportation, incentive contract design problem has significant impacts on the benefit of a multimodal transport operator (MTO). In this paper, we analyze a typical water-rail-road (WRR) intermodal transportation that is composed of three serial transportation stages: water, rail and road. In particular, the entire transportation process is planned, organized, and funded by an MTO that outsources the transportation task at each stage to independent carriers (subcontracts). Due to the variability of transportation conditions, the travel time of each transportation stage depending on the respective carrier’s effort level is unknown (asymmetric information) and characterized as an uncertain variable via the experts’ estimations. Considering the decentralized decision-making process, we interpret the incentive contract design problem for the WRR intermodal transportation as a Stackelberg game in which the risk-neutral MTO serves as the leader and the risk-averse carriers serve as the followers. Within the framework of uncertainty theory, we formulate an uncertain bi-level programming model for the incentive contract design problem under expectation and entropy decision criteria. Subsequently, we provide the analytical results of the proposed model and analyze the optimal time-based incentive contracts by developing a hybrid solution method which combines a decomposition approach and an iterative algorithm. Finally, we give a simulation example to investigate the impact of asymmetric information on the optimal time-based incentive contracts and to identify the value of information for WRR intermodal transportation.

Highlights

  • Water-rail-road (WRR) intermodal transportation is defined as a system that transfers the cargo from an origin to a destination in one and the same intermodal transportation unit (e.g., a twenty-foot equivalent unit (TEU) container) without handling of the goods themselves when changing modes by using three different means of transport: water, rail and road

  • Compared to the unimodal one, the basic features of the WRR intermodal transportation are: (1) the entire transportation process can be divided into a series of sequential transportation stages; (2) three transportation modes are used for the carriage of cargos; (3) one party, usually called multimodal transport operator (MTO), is responsible for the entire carriage and acts as a principal

  • We addressed the uncertain incentive contract design problem with an MTO and three carriers working in sequence in a WRR intermodal transportation setting

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Summary

Introduction

Water-rail-road (WRR) intermodal transportation is defined as a system that transfers the cargo from an origin to a destination in one and the same intermodal transportation unit (e.g., a twenty-foot equivalent unit (TEU) container) without handling of the goods themselves when changing modes by using three different means of transport: water, rail and road. One of the major reasons for the fastest possible delivery is that the MTO wants the container to come back as soon as possible after the delivery of cargo so that he can have a higher utilization ratio of the container and eventually earn more freight. With such a concern, this paper aims at designing the time-based contracts offered by MTO for the carriers to satisfy the cargo-owner’s needs by providing the optimized door-to-door services with shorter delivery time

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