Optimizing Rail Transport Service in a Dry Port System

Abstract

With the prosperity of global trade and maritime transportation, dry port is playing a significant role in freight transport industry through relieving seaport congestion and facilitating improved logistics solutions. This article studies the rail shuttle service pricing and scheduling problem in a dry port system with one dry port and multiple shippers. Bilevel models are developed to address the interaction between the dry port and shippers, with the dry port as the leader and individual shippers as followers. The optimal properties of the proposed bilevel model are analyzed, and a solution procedure is proposed to obtain the global optimal solution. Numerical studies are carried out to investigate the sensitivity of optimal decisions, and performance of both parties with respect to various system parameters. This study shows that offering a higher storage price could not always bring higher profit for the dry port. An extremely high storage price will reduce shippers’ total costs, especially for shippers with high production rates. If the seaports’ cutoff time is short, shippers with low production rates would have to bear high expenses. It is also found that low setup costs at shippers will bring not only cost savings for shippers, but also profit improvement for the dry port.