Modelling individual preferences of goods receivers for a Receiver-led delivery consolidation service

Abstract

• Proposed consolidation schemes should be optimised to minimise disruption to current delivery practices to goods receivers. • Receivers’ willingness to participate in the RLC service is influenced by the time-window of the consolidated delivery and value-added service. • The willingness-to-pay estimation suggests that businesses might be inclined to pay for a RLC service that could improve the delivery reliability for their orders. There have been various initiatives to consolidate freight deliveries. Researchers have been primarily concerned with assessing the impact upon freight carriers. This study addresses a subject that has received limited attention: Receiver-led delivery consolidation (RLC) policy. The study aims to characterise freight receivers’ preferences for a RLC service and delve more deeply into the most preferred RLC policy variables that could induce receivers’ propensity towards choosing a RLC service. This study estimates behavioural responses of businesses in Melbourne’s CBD, Australia using a mixed logit model a latent-class logit mode with respect to receivers’ preferences for the RLC service as well as quantifying the willingness to pay (WTP) for a RLC delivery service. The modelling results show that the time-window of consolidated delivery and availability of relevant value-added services significantly influence receivers’ preferences. The study findings reveal high preferences for versions of a RLC service that maintain current delivery practices. The results of the WTP calculation suggest that while there might be a net benefit for receivers to pay for services, delivery characteristics of receivers, such as their sub-industry type, highly influence WTP. Future freight consolidation should be optimised by sub-industry and should accommodate as closely as possible the current delivery practices that businesses use. Accordingly, this study proposes suitable configurations of a RLC service based on the individual-level preferences of the most willing sub-industries.