On urban co-modality: Non-cooperative and cooperative games among freight forwarder, carrier and transit operator

Abstract

This paper models a public transit system that can serve both passengers and urban freight, i.e., urban co-modality, and investigates the system-wide impacts of co-modality on existing urban freight forwarding service, freight carrier and urban transit services. In the co-modal system, we model one transit operator that serves passengers and provides co-modal services, one freight forwarder (an intermediary) that serves freight customers and uses freight transportation services provided by a freight carrier or the transit operator, and one freight carrier that provides services to the freight forwarder. We derive the analytical conditions under which co-modal operations can improve the profits of the freight forwarder, carrier and transit operator, and the consumer surpluses of freight customers and passengers compared with the status quo without co-modality. We also analytically and numerically compare the optimal operation decisions, the three operators’ profits, and the users’ welfare under different games among the operators (non-cooperative and cooperative games). Our results show that when the three operators are in a non-cooperative relationship, the freight carrier might have a profit loss due to the decreased freight units allocated to the direct road channel; whereas, both the freight forwarder and the transit operator would have profit gains from the co-modality. The numerical studies further reveal that to ensure a Pareto-improving co-modal system, the operators have to reduce the freight/transit service fare and co-modal transportation price.