Collaborative shipping under different cost-sharing agreements

Silvia Valeria Padilla Tinoco, Stefan Creemers, Robert Boute*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

27 Scopus citations

Abstract

We study collaborative shipping where two shippers bundle their shipments to share the same transportation vehicle (also known as co-loading). The goal of such a collaboration is to reduce the total number of transports, thereby reducing transportation costs and CO2 emissions. To synchronize the replenishment of both companies, we adopt a can-order joint replenishment policy for both companies, and we analyze how the costs of each individual company are impacted by the collaboration. We consider different agreements to redistribute the costs (or the gains) of the collaboration, ranging from no cost redistribution at all, sharing the transportation costs (or its gains) only, to sharing the total logistics costs (or its gains) that are impacted by the collaboration, i.e., transportation + inventory costs. We show that the stability (and thus the long-term viability) of the partnership strongly depends on the cost-sharing agreement, in combination with the allocation mechanism used to share the costs (or gains) of the coordination. Although most companies focus on the redistribution of transportation costs, we show that this might not lead to a stable situation where each individual company eventually benefits from collaboration.

Original languageEnglish (US)
Pages (from-to)827-837
Number of pages11
JournalEuropean Journal of Operational Research
Volume263
Issue number3
DOIs
StatePublished - Dec 16 2017

Keywords

  • Can-order policy
  • Gain sharing
  • Horizontal collaboration
  • Joint replenishment
  • Supply chain management

ASJC Scopus subject areas

  • Computer Science(all)
  • Modeling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management

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