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Consolidation in Urban Freight Transportation - Cost Allocation Models
Linköping University, Department of Science and Technology, Communications and Transport Systems. Linköping University, Faculty of Science & Engineering.ORCID iD: 0000-0002-6006-3279
Linköping University, Department of Science and Technology, Communications and Transport Systems. Linköping University, Faculty of Science & Engineering.
Linköping University, Department of Science and Technology, Communications and Transport Systems. Linköping University, Faculty of Science & Engineering.
2018 (English)In: Asia-Pacific journal of operational research, ISSN 0217-5959, E-ISSN 1793-7019, Vol. 35, no 4, article id 1850023Article in journal (Refereed) Published
Abstract [en]

In this paper, the focus is on the role of the municipality, as an enabler of a collaboration between freight forwarders and the municipality in which the consolidation of goods is considered as a means for goods flow improvement in urban freight transportation. We present a cost allocation model that is based on solution concepts from cooperative game theory, for allocating the operational costs associated with the collaboration. It is assumed that the municipality is willing to carry some cost to ensure a stable collaboration for the potential benefits received, e.g., reduced traffic congestion in the city. The model is applied to some illustrative examples, and the cost allocation results are discussed. It is shown that the role of the municipality may be decisive in achieving a stable collaboration between the freight forwarders, and further that the municipality does not necessarily need to contribute to covering the costs.

Place, publisher, year, edition, pages
WORLD SCIENTIFIC PUBL CO PTE LTD , 2018. Vol. 35, no 4, article id 1850023
Keywords [en]
Collaboration; cost allocation; city distribution center; municipality
National Category
Transport Systems and Logistics
Identifiers
URN: urn:nbn:se:liu:diva-150486DOI: 10.1142/S0217595918500239ISI: 000441395200005OAI: oai:DiVA.org:liu-150486DiVA, id: diva2:1241719
Note

Funding Agencies|Swedish Energy Agency; VINNOVA

Available from: 2018-08-24 Created: 2018-08-24 Last updated: 2018-12-13
In thesis
1. Cooperative Transportation Planning and Cost Allocation
Open this publication in new window or tab >>Cooperative Transportation Planning and Cost Allocation
2015 (English)Licentiate thesis, comprehensive summary (Other academic)
Abstract [en]

A freight forwarder may consolidate its goods transportations in order to achieve a more efficient operation. When goods transportations are consolidated, they may reduce operational costs, e.g. labor and fuel. This can be further improved if a number of freight forwarders cooperate and consolidate their collective goods transportations, i.e. it is a cooperation between competitors, a coopetition. In order to maintain the cooperation, a suitable business model, in which fair cost allocations plays an important role is essential. The potential by cooperating is not exclusive to freight forwarders, but in fact, any type of goods transportation planning may benefit from cooperation. In this thesis, cooperative game theory is used as an academic tool to study cooperation between stakeholders in different transportation planning applications. Cooperative game theory defines a number of criteria for fair cost allocations.

In Paper 1, the role of the municipality as an enabler of a cooperation between fictitious freight forwarders in an urban area, is studied. In this case, the municipality acts as a stakeholder with unusual characteristics. It is shown that a stable cooperation can be achieved if the municipality is willing to carry some of the cost. This cost is specified and discussed in Paper 1. The results of Paper 2 contribute to game theory by introducing a further development of a cost allocation method. Some small numerical examples are presented in order to illustrate the resulting changes. In Paper 3, the process of establishing a cooperation is studied, where the stakeholders, in this case forest companies, join the cooperation sequentially. Who will join and in what order, is not predetermined. It is shown that a stable cooperation can be achieved despite the uncertainty. This is done by using the cost allocation methods presented.

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2015. p. 47
Series
Linköping Studies in Science and Technology. Thesis, ISSN 0280-7971 ; 1726
National Category
Transport Systems and Logistics Economics and Business
Identifiers
urn:nbn:se:liu:diva-121559 (URN)10.3384/diss.diva-121559 (DOI)liu-tek-lic 0280-7971 (Local ID)978-91-7685-969-8 (ISBN)liu-tek-lic 0280-7971 (Archive number)liu-tek-lic 0280-7971 (OAI)
Presentation
2015-10-23, TP1, Täppan, Campus Norrköping, Norrköping, 10:15 (Swedish)
Opponent
Supervisors
Available from: 2015-09-24 Created: 2015-09-24 Last updated: 2018-12-19Bibliographically approved
2. Cost allocation methods in cooperative transportation planning
Open this publication in new window or tab >>Cost allocation methods in cooperative transportation planning
2018 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Transportation, together with transportation planning for goods, provides good conditions for economic growth and is a natural part of modern society. However, transportation has negative side effects, including emissions and traffic congestion. A freight forwarder may consolidate shippers’ goods in order to reduce some of the negative side effects, thus reducing emissions and/or congestion as well as operational costs. The negative side effects as well as operational costs can be further reduced if a number of freight forwarders cooperate and consolidate their collective goods flows. Consolidation refers to the process of merging a number of the freight forwarders’ shipments of goods into a single shipment. In this case, the freight forwarders are cooperating with competitors (the other freight forwarders).

Fair cost allocations are important for establishing and maintaining cost-efficient cooperation among competing stakeholders. Cooperative game theory defines a number of criteria for fair cost allocations and the problem associated with the decision process for allocating costs is referred to as the cost allocation problem. In this thesis, cooperative game theory is used as an academic tool to study cooperation among stakeholders in two transportation planning applications, namely 1) the distribution of goods bound for urban areas and 2) the transportation of wood between harvest areas and industries.

In transportation planning application 1, there is a cooperation among a number of freight forwarders and a municipality. Freight forwarders’ goods bound for an urban area are consolidated at a facility located just outside the urban area. In this thesis, operational costs for distributing the goods are assessed by solving vehicle routing problems. Common methods from cooperative game theory are used for allocating the operational costs among the freight forwarders and the municipality. In transportation planning application 2, forest companies cooperate in terms of the supply and transportation of common resources, or more specifically, different types of wood. Each forest company has harvest areas and industries to which the wood is transported. The resources may be bartered, that is, the forest companies may transport wood from each other’s harvest areas.

In the cooperative game theory literature, the stakeholders are often treated equally in the context of transportation planning. However, there seems to be a lack of studies on cooperations where at least one stakeholder differs from the other stakeholders in some fundamental way, for instance, as an initiator or an enabler of the cooperation. Such cooperations are considered in this thesis. The municipality and one of the forest companies are considered to be the initiators in their respective applications.

Five papers are appended to this thesis and the overall aim is to contribute to the research into cooperative transportation planning by using concepts from cooperative game theory to develop methods for allocating costs among cooperating stakeholders. The purpose of this thesis is to provide decision support for planners in the decisionmaking process of transportation planning to establish cost-efficient and stable cooperations.

Some of the main outcomes of this thesis are viable and practical methods that could be used in real-life situations to allocate costs among cooperating stakeholders, as well as support for decisionmakers who are concerned with transportation planning. This is done by demonstrating the potential of cooperation, such as cost reduction, and by suggesting how costs can be allocated fairly in the transportation planning applications considered. Lastly, a contribution to cooperative game theory is provided; the introduction of a development of the equal profit method for allocating costs. The proposed version is the equal profit method with lexicography, which, in contrast to the former, guarantees to yield at most one solution to any cost allocation problem. Lexicography is used to rank potential cost allocations and the unambiguously best cost allocation is chosen.  

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2018. p. 59
Series
Linköping Studies in Science and Technology. Dissertations, ISSN 0345-7524 ; 1911
National Category
Transport Systems and Logistics
Identifiers
urn:nbn:se:liu:diva-153338 (URN)10.3384/diss.diva-153338 (DOI)9789176853504 (ISBN)
Public defence
2019-01-18, K3, Kåkenhus, Campus Norrköping, Norrköping, 13:15
Opponent
Supervisors
Available from: 2018-12-13 Created: 2018-12-13 Last updated: 2018-12-14Bibliographically approved

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