Abstract - The internationalFinancial Crisis has made the Less-than-truckload industry face with severechallenges of survival and development. In this case, more and more small andmedium-sized LTL carriers choose to collaborate as the potential savings arelarge, often in the range 5-15%. A key question is how profits/savings shouldbe distributed among the participants. Since every LTL carriers are guided bytheir own self-interests and their contributions to the collaboration are quitedifferent, the proposed allocation method should be a collectively andindividually desirable solution. In this paper, we firstly analyze the profitopportunity through collaboration and present mechanisms to realize thesebenefits by two illustrative examples. Based on the cooperative game theory, weformulate the LTL collaboration game and discuss the well-known profitallocations including proportional allocation, Shapley value and Nucleolus. Wethen propose a new allocation method Weighted Relative Savings Model (WRSM)which is in the core and minimizes the maximum difference between thecontribution ratio weighted relative savings among the participants.Computational results for real-life instances are presented and analyzed toshow the effectiveness of WRSM.
Index Terms – collaborativetransportation,cooperative game,profit allocation
I. Introduction
Accordingto the reportfrom Chinese Federation of Logistics &Purchasing (CFLP)about"theImpact of Financial Crisis on China LogisticsIndustryand the Countermeasures" atitsseventh China Logistics Academic AnnualMeetingin 2008, the decline in international trade of China is now going upward throughthe industry chainand spreading out to the logistics industry at alllevels.
In road transportation, although thetransportationcost is on the rise, freight can only be maintained at a relatively low levelbecause of the decrease in transportation requestsand the relative excess of transportation resources. In previous years, freight oftenrises 20%to 30% starting fromSeptember. But in 2008, instead of the rise, there is asignificant decline. The Price Index of Truckload transportation is 60.2 in November, dropped by 3.9 percentagepoints compared with October. And the Price Index of heavyandlight cargo Less-Than-Truckloadtransportation are66.9 and 133.6 respectively, dropped by 4.6percentage points and 11.9 percentage pointscompared with October.Thedecrease in demand exacerbates the competition in logisticsmarket. As the main form of socialization transportation, LTLsegment of the trucking industry is faced with severe challenges ofsurvival and development.