Consolidation in Urban Freight Transportation — Cost Allocation Models

Abstract

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.

A game-theoretic multi-stakeholder model for cost allocation in urban consolidation centres

“…For instance, Van Heeswijk et al (2020) highlight the financial unsustainability of UCCs, providing, de facto, the motivation for our analysis, which is aimed at finding optimal cost allocation policies that are capable of mitigating the original structure of logistical costs. This is similar to the work performed by Dahlberg et al (2018); however, this study assumes that LAs are willing to face some costs in order to ensure a stable collaboration among stakeholders. Such a requirement is a strong one and assumes a financial intervention of LAs in UCC networks.…”

“…Such a requirement is a strong one and assumes a financial intervention of LAs in UCC networks. The focus in Dahlberg et al (2018) is on the stability of cooperation; conversely, our focus is to define policies that promote the fairness of cooperation among stakeholders. In general, stability and fairness are distinct concepts in cooperative game theory.…”

“…It must be noticed that there is a dearth of research on these specific aspects. Some initial attempts to study allocation schemes when the municipality is somehow dominant have been provided by Dahlberg et al (2018). Van Heeswijk et al (2020) provided an agent-based model for the study of urban logistics systems set up by local authorities; the result of those simulations shows that the implementation of UCCs can considerably reduce negative externalities deriving from urban freight transport; however, a detailed scenario analysis confirms that such policies might not achieve financial viability.…”