Empirical Study: Order Sharing Between Transportation Companies may Result in Cost Reductions Between 5 to 15 Percent

In the traditional situation, all transportation companies had their own clients and their own set of transportation orders.In a situation with order sharing, transportation companies mutually share their data on transportation orders.This enables a much better allocation of orders to the transportation companies than in the traditional situation.In this paper we discuss the economic and other consequences of order sharing.The conclusions in this paper are based on both a real-life case and a simulation study.The simulation study shows that due to order sharing transportation costs may decrease by 5 to 15 percent, and sometimes even more.transport industry;cooperation;simulation

Logistic Efficiency Through Horizontal Cooperation: The Case of Flemish Road Transportation Companies

This paper describes a practical application of Data Envelopment Analysis (DEA) to the Flemish road transportation sector.The efficiency of 82 road transportation companies responding to a large-scale survey focused on horizontal cooperation is evaluated, based on two inputs and two outputs.Various DEA models are used to identify differences between subgroups of respondents.The results demonstrate that, in general, Flemish road transportation companies operate at unacceptably low efficiency levels.Given the findings that the median company is operating on too small a scale one apparent remedy would be a dramatic increase in market concentration through mergers and acquisitionshorizontal cooperation;road transportaion companies;data envelopment analysis

Horizontal Cooperation in Transport and Logistics.

This thesis deals with horizontal cooperation in transport and logistics. It contains a comprehensive discussion of the available academic literature on this topic, many practical examples, and an empirical investigation of opportunities and impediments. Furthermore, three enabling concepts for horizontal cooperation in transport and logistics are developed. The analysis is practice oriented in the sense that most of the results are based on real-life datasets. In case studies conducted, the most important goal is to learn lessons that are also applicable to other cases or industries. By contrast, in chapters that have a more theoretical point of departure, efforts are made to draw conclusions that are directly applicable in practice. Many different research techniques are used in this thesis. They include case study analysis, surveys, exploratory factor analysis, regression, game theory, vehicle routing heuristics, and facility location heuristics.

Insinking: A Methodology to Exploit Synergy in Transportation

vehicle routing;cooperative games;retailing;insinking;Shapley Monotonic Path;Logistic Service Providers

Enriching the tactical network design of express service carriers with fleet scheduling characteristics

Express service carriers provide time-guaranteed deliveries of parcels via a network consisting of nodes and hubs. In this, nodes take care of the collection and delivery of parcels, and hubs have the function to consolidate parcels in between the nodes. The tactical network design problem assigns nodes to hubs, determines arcs between hubs, and routes parcels through the network. Afterwards, fleet scheduling creates a schedule for vehicles operated in the network. The strong relation between flow routing and fleet scheduling makes it difficult to optimise the network cost. Due to this complexity, fleet scheduling and network design are usually decoupled. We propose a new tactical network design model that is able to include fleet scheduling characteristics (like vehicle capacities, vehicle balancing, and drivers' legislations) in the network design. The model is tested on benchmark data based on instances from an express provider, resulting in significant cost reductions

Joint Route Planning under Varying Market Conditions

Purpose - To provide empirical evidence on the level of savings that can be attained by joint route planning and how these savings depend on specific market characteristics.Design/methodology/approach - Joint route planning is a measure that companies can take to decrease the costs of their distribution activities. Essentially, this can either be achieved through horizontal cooperation or through outsourcing distribution to a Logistics Service Provider.The synergy value is defined as the difference between distribution costs in the original situation where all entities perform their orders individually, and the costs of a system where all orders are collected and route schemes are set up simultaneously to exploit economies of scale.This paper provides estimates of synergy values, both in a constructed benchmark case and in a number of real-world cases.Findings - It turns out that synergy values of 30% are achievable.Furthermore, intuition is developed on how the synergy values depend on characteristics of the distribution problem under consideration.Practical implications - The developed intuition on the nature of synergy values can help practitioners to find suitable combinations of distribution systems, since synergy values can quickly be assessed based on the characteristics of the distribution problem, without solving large and difficult Vehicle Routing Problems.Originality/value - this paper addresses a major impediment to horizontal cooperation: estimating operational savings upfront.Horizontal cooperation;Distribution;Outsourcing;Vehicle routing with time windows;Retail

Logistic Efficiency Through Horizontal Cooperation:The Case of Flemish Road Transportation Companies

This paper describes a practical application of Data Envelopment Analysis (DEA) to the Flemish road transportation sector.The efficiency of 82 road transportation companies responding to a large-scale survey focused on horizontal cooperation is evaluated, based on two inputs and two outputs.Various DEA models are used to identify differences between subgroups of respondents.The results demonstrate that, in general, Flemish road transportation companies operate at unacceptably low efficiency levels.Given the findings that the median company is operating on too small a scale one apparent remedy would be a dramatic increase in market concentration through mergers and acquisitions

Enriching the Tactical Network Design of Express Service Carriers with Fleet Scheduling Characteristics

Express service carriers provide time-guaranteed deliveries of parcels via a network consisting of nodes and hubs. In this, nodes take care of the collection and delivery of parcels, and hubs have the function to consolidate parcels in between the nodes. The tactical network design problem assigns nodes to hubs, determines arcs between hubs, and routes parcels through the network. Afterwards, fleet scheduling creates a schedule for vehicles operated in the network. The strong relation between flow routing and fleet scheduling makes it difficult to optimise the network cost. Due to this complexity, fleet scheduling and network design are usually decoupled. We propose a new tactical network design model that is able to include fleet scheduling characteristics (like vehicle capacities, vehicle balancing, and drivers’ legislations) in the network design. The model is tested on benchmark data based on instances from an express provider, resulting in significant cost reductions.express service carriers;freight transportation;tactical hub network design;integer programming;fleet scheduling;heuristics

Factory Gate Pricing: An Analysis of the Dutch Retail Distribution

Factory Gate Pricing (FGP) is a relatively new phenomenon in retail distribution.Under FGP, products are no longer delivered at the retailer distribution center, but collected by the retailer at the factory gates of the suppliers.Owing to both the asymmetry in the distribution networks (the supplier sites greatly outnumber the retailer distribution centers) and the better inventory and transport coordination mechanisms, this is likely to result in high savings.A mathematical model was used to analyze the benefits of FGP for a case study in the Dutch retail sector.Extensive numerical results are presented to show the effect of the orchestration shift from supplier to retailer, the improved coordination mechanisms, and sector-wide cooperation.pricing;retailing;distribution;supply chain management;Netherlands

Insinking:A Methodology to Exploit Synergy in Transportation

Over the last decades, companies ’ average profit margins have been decreasing and as a result efficiency of transportation processes has become critical. To cut down transportation costs, shippers often outsource their transportation activities to a Logistics Service Provider of their choice. This paper proposes a procedure that puts the initiative with the service provider instead. This procedure is based on both operations research and game theoretical insights. To stress the contrast between the traditional push approach of outsourcing, and the here proposed pull approach where the service provider is the initiator of the shift of logistics activities from the shipper to the Logistics Service Provider, we will refer to this phenomenon as insinking, the antonym of outsourcing. Insinking has the advantage that the logistics service provider can proactively select a group of shippers with a strong synergy potential. Moreover, these synergies can be allocated to the participating shippers in a fair and sustainable way by means of customized tariffs. Insinking is illustrated by means of a case study in the Dutch grocery transportation sector