Locating urban and regional container terminals in a competitive environment: An entropy maximising approach

Abstract

Abstract A flexible and policy-oriented model based on the principle of entropy maximisation is proposed for locating competitive multi-user freight facilities in general and inland multi-user intermodal container terminals (IMTs) in particular in a context where multiple users have choices which include whether or not to use the facilities. The overall problem is decomposed into a linked facility location problem (FLP) and a mode choice problem (MCP). The MCP is cast as a three-level nested probability model for determining modal and IMT demands. It was shown that for terminals with sufficiently large handling capacities, the objective function of the overall problem reduces to that of the MCP, the result is a single level mathematical program, which locates facilities to maximise shippers’ expected utility or consumer surplus. The model is suitable for urban or regional planning, but may also be used by terminal operators to estimate shipper demand for given locations. Algorithms for solving the model, principal features of the algorithms and the model are also presented.