Bid Price Optimization for Simultaneous Truckload Transportation Procurement Auctions

We study simultaneous transportation procurement auctions from a truckload carrier’s perspective. We formulate a stochastic bid price optimization problem with the objective of maximizing a carrier’s expected profit. The formulation takes into account the synergies among the lanes and the competing carriers’ bidding strategies. For solving this stochastic optimization problem, we develop an iterative coordinate search algorithm that finds good solutions efficiently. The effectiveness of the developed algorithm and the overall strategy is demonstrated through computational experiments.