Abstract
The intermodal hinterland transportation of maritime containers is under pressure from port authorities and shippers to achieve a more integrated, efficient network operation. Current optimisation methods in literature yield limited results in practice, though, as the transportation product structure limits the flexibility to optimise network logistics. Synchromodality aims to overcome this by a new product structure based on differentiation in price and lead time. Each product is considered as a fare class with a related service level, allowing to target different customer segments and to use revenue management for maximising revenue. However, higher priced fare classes come with tighter planning restrictions and must be carefully balanced with lower priced fare classes to match available capacity and optimise network utilisation. Based on the developments of intermodal networks in North West European, such as the network of European Gateway Services, the Cargo Fare Class Mix problem is proposed. Its purpose is to set limits for each fare class at a tactical level, such that the expected revenue is maximised, considering the available capacity at the operational level. Setting limits at the tactical level is important, as it reflects the necessity of long-term agreements between the transportation provider and its customers. A solution method for an intermodal corridor is proposed, considering a single intermodal connection towards a region with multiple destinations. The main purpose of the article is to show that using a limit on each fare class increases revenue and reliability, thereby outperforming existing fare class mix policies, such as Littlewood.
Highlights
Since 2011, the study of planning models for intermodal container transportation has received much attention, e.g. in Caris et al (2013), Nabais et al (2013), SteadieSeifi et al (2014), Li et al (2015) and Van Riessen et al (2015a, 2016)
We show that including limits for each fare class is necessary to prevent high costs of trucking excess cargo, it is even beneficial in terms of expected revenue compared to alternatives
We demonstrate the benefit of booking limits for each fare class on a single intermodal corridor, with one intermodal route, e.g. a train connection between the deep sea port and an inland terminal
Summary
Since 2011, the study of planning models for intermodal container transportation has received much attention, e.g. in Caris et al (2013), Nabais et al (2013), SteadieSeifi et al (2014), Li et al (2015) and Van Riessen et al (2015a, 2016). EGS is considering to offer a differentiated portfolio to the market, starting with a single corridor in its network Their goal is to increase both utilisation of inland trains and vessels, and to increase reliability of container transports arriving on time. We study their case to find the benefit of a new set of two products with a different degree of flexibility for a single corridor of container hinterland transportation. We show that including limits for each fare class is necessary to prevent high costs of trucking excess cargo, it is even beneficial in terms of expected revenue compared to alternatives We define these problems as the Cargo Fare Class Mix (CFCM) problem.
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