Fair and Efficient Allocation of Transportation (FEAT)

Transportation carriers fulfill transport requests for other parties and provide the physical connection between shippers, who own the freight, and their customers. To improve the situation and stay competitive, carriers must focus on transport requests offering a relatively high profit margin. A particular problem is caused by empty (return) trips, which by definition do not generate revenue, but cause costs and thereby reduce profits. The main goal of the present project is to study collaborative mechanisms to reallocate trips between carriers and thus improve the system-wide efficiency. We consider periodic shipments of goods in a three-stage setting. In local trips, goods are collected from costumers to hubs. A carrier is assumed to have at least two hubs, which are connected by a long haul transportation leg. Goods arriving at the destination of this main leg are again distributed to customers using local trips.