Cooperation in Urban Transportation

Cooperation in Urban Transportation

Tom Van Woensel

/ School of Industrial Engineering - prof. dr. Tom Van Woensel

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• Urban environments• Horizontal collaboration between LSPs

• Analysis and discussion• Planning and scheduling of their operations: Vehicle

Routing Problems• Gain sharing mechanisms

• Collaboration between public and freight transport

Caveat emptor: ongoing work !

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Urban Environments and Transportation

• Transportation demand is growing and expected to continue growing

• Last-mile logistics is more and more situated in growing urban areas:• Increasing urban population growth• (Over)congested• Difference with emerging cities

• Both internal costs and the external costs are key logistics drivers• Decarbonisation to reduce pollution

/ School of Industrial Engineering - prof. dr. Tom Van Woensel PAGE 3

Urban Environments and Transportation

• Quality (e.g. carbon footprint) and quantity (e.g. transport movements) of the distribution activities• Better orchestration of the different physical flows by

considering all relevant stakeholders− Retailers− LSPs− Government− Public

• Coordination and consolidation challenges are not new, but sound and sustainable solutions are not easily realized.


(The lack of) Cooperation and coordination in urban transportation


Routing and Scheduling in urban areas


Two-index formulation for VRP


\{ }

min ij iji V n j i

d x

0\0

2jj V

x K

Subject to

2 \{0}hi ijh i j i

x x i V

2 ( ) \{0}, ,hi ij

i S h i i S j ih S j S

x x r S S V S

{0,1}, , \{0},ijx i j V i j {0,1,2}, \{0}ijx j V

v0

( )E S


VRP and Time windows

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=1 if vehicle k drives directly from i to j

The time vehicle k startsServicing customer j

cost trav. from i to j

demand at customer i

capacity of vehicle k

depot at start

depot at end

time to travel directly from i to jplus service time in i

large number

ASSIGNMENT

CAPACITY

FLOW

CONSER-

VATION

TIMEWINDOWS

dashboard LSP 1

Parameters1. > 3plts2. north NL3. HACCP4. Non smelling5. ….

Parameters1. unrestricted2. LZV only3. TLN member4. Digital VVA 5. ….

Parameters1. FTL only2. Digital VVA3. chilled4. ….

dashboard LSP 2 dashboard LSP 3

Three Dutch carriers


Three carriers consolidated

Delta Absolute

Δ Cost-factor -4.8% -24.993

Δ Kms driven -4.7% -32.463

Δ Empty kilometers -15.2% -38.547

Δ Driving hours -4.9% -497

Δ Vehicles -12.9% -55

# Orders 6.762

# Routes 3.647

# Pallets 83.887

# Vehicles as-is 425

Gain sharing mechanisms needed


Collaboration among Logistics Service Providers


Distance Number of Trucks Utilization (avg)LSP 1 764.79 10 46%

LSP 2 750.28 9 49%

Total 1515.07 19 47%Cooperation 828.94 10 75%

Difference -45% -47% +38%

Some variants to the problem

Distance Vehicles usedLSP1 LSP2 Total LSP1 LSP2 Total

Equal (50/50) 764.79 750.28 1515.07 9 10 19

Unequal (20/80) 590.57 790.87 1381.44 6 10 16

Regional (C/R)No overlap

650.94 217.30 868.24 8 3 11

Regional (C/R)Minor overlap

642.98 297.09 940.07 8 4 12


Cooperation: Distance = 828.94 with 10 vehicles

C/R = Country/Regional player

What about the cost savings?


Total Km savings Km savings per dropLSP1 LSP2 Total LSP1 LSP2 Total

Equal (50/50) 255.49 256.70 512.18 5.11 5.13 5.12

Unequal (20/80) 316.02 95.20 411.22 15.80 1.19 4.11

Regional (C/R)No overlap

0.00 17.76 17.76 0.00 0.66 0.18

Regional (C/R)Minor overlap

48.28 23.20 71.48 0.69 0.77 0.71

• Cost savings are not always equal over all partners• Limited savings if no synergy in the networks

• Shapley value for player i:

• Allocates to each participant its average marginal contribution

• Complete random order of entering of participants• For two players:

• Equal allocation of the total value of cooperation• Regardless of the specific characteristics (e.g. size,

orders, etc.) of the two players

How to share the benefits?


Side Payments are needed


Total km savings Side paymentsLSP1 LSP2 Total LSP1 LSP2

Equal (50/50) 255.49 256.70 512.18 -0.61 0.61

Unequal (20/80) 316.02 95.20 411.22 110.41 -110.41

Regional (G/R)No overlap

0.00 17.76 17.76 -8.88 8.88

Regional (G/R)Minor overlap

48.28 23.20 71.48 -12.54 12.54

A transparent and clear cost accounting system is needed

What about shippers?

• Tariffs adapted following LSP collaborations• Proposal: follow Shapley allocation

• Two players: Shipper and LSP• 50/50 allocation rule


No collaboration Collaboration – no sharing with

Shipper

Sharing with Shipper

Tariff 100 100 95 (-5 from coll.)

Costs 97 90 90

Margin 3 10 5

How certain are we about this?

What about time and stochasticity?

• Volumes offered to the coalition• Changes over time, contracts, tenders, etc.• How to cope with this if one partner falls behind?• Consequences are significant


No collaboration Sharing with Shipper

Volumes in collaboration

Tariff 100 95 (-5 from coll.) 95

Costs 97 90 [92,97]

Margin 3 5 [3,-2]

What do we need?

• Sound concepts for gain sharing:• That survive over time and uncertainty• That are fast measurable/quantifiable throughout the

collaborations• That consider the dynamics and stochastics of the LSP

and shipper’s world• A gain sharing control tower?

• Neutral instance• Open bookkeeping with regards to costs


A different cooperation

• Combine passenger transport and freight transport• Different levels:

• Share dedicated resources, e.g. priority lanes• Share equipment: taxi, bus, train, boat

• Some examples:• Passenger airplanes also carry freight• Norwegian Hurtigruten: mail, cargo and passengers• Dabbawalla


Dabbawalla

• 0% fuel, 0% investment, 0% modern tech, 0% Disputes, 99.99% performance, 100 % Customers Satisfaction

• 400,000 transactions every day (including return), i.e. 400,000*25 days*12 months= 120,000,000 transactions per year


Grant Road(12)

Churchgate(1-10)

Lower Parel(14)

2

3

7

4

5

6

Zones for destination

DistributionBy Carriersat lunchtimeTo offices

Point of AggregationAnd Sorting

C DB

A E

Collection from home

1

The Flow Logic: using trains!


Using taxi’s for parcel deliveries


Trail of one taxi in San Francisco (1 day)


Trail of 30 taxis in San Francisco (1 day)



Taxis for parcel delivery

• Online optimization• Stochastic customers• Stochastic demand• Pickup and delivery problems

• Using taxis for parcels:• Utilized (with customer): time value?• Available (no customer): use the ‘dead’ time

• Joint work started with Connexxion for The Netherlands

• PhD research of Baoxiang Li

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Overview and summary

• Collaboration among LSP• Gain sharing principles• How to translate this into practice?• The role of shippers in the collaborations

• Collaboration between public and freight transport• Interesting research questions arise• Still an open research field


Thank you.Any questions/suggestions/comments?


Cooperation in Urban Transportation

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