A Framework for the study of Carrier Strategies in an Auction Based Transportation Marketplace

Online markets for transportation services, in the form of Internet sites that dynamically match shipments (shippers’ demand) and transportation capacity (carriers’ offer) through auction mechanisms are changing the traditional structure of transportation markets. A general framework for the study of carriers’ strategies in a transportation auction marketplace is provided. The unique characteristics of these marketplaces and the sources of difficulty in analyzing the performance of these marketplaces under different carrier bidding strategies are discussed. A simulation framework is used to explore the complex engineering and economic processes and issues that arise in a transportation marketplace, which are difficult to explore using standard analytical or statistical tools. Some results and the overall simulation framework are also discussed.