Horizontal cooperation among freight carriers: request allocation and profit sharing

In modern transportation systems, the potential for further decreasing the costs of ful lling customer requests is severely limited while market competition is constantly reducing revenues. However, increased competitiveness through cost reductions can be achieved if freight carriers cooperate in order to balance their request portfolios. Participation in such coalitions can bene t the entire coalition, as well as each participant individually, thus reinforcing the market position of the partners. The work presented in this paper uniquely combines features of routing and scheduling problems and of cooperative game theory. In the rst part, the pro t margins resulting from horizontal cooperation among freight carriers are analyzed. It is assumed that the structure of customer requests corresponds to that of a pickup and delivery problem with time windows for each freight carrier. In the second part, the possibilities of sharing these pro t margins fairly among the partners are discussed. The Shapley value can be used to determine a fair allocation. Numerical results for real-life and arti cial instances are presented.