Collaborative Transportation Planning of Less-Than-Truckload Freight: Request Exchange through a Route-based Combinatorial Auction

Collaborative transportation planning (CTP) within a coalition of small and mid-sized freight carriers can be used as a powerful instrument to improve the operational efficiency of the coalition members. In such coalitions, transportation requests acquired from different freight carriers are exchanged among coalition members in order to reduce the total fulfillment costs. We consider the CTP for a set of independent freight carriers exchanging less-than-truckload (LTL) transportation requests and we include the realistic restriction that all collaborating partners have only limited capacities in their fleets. In order to remain their autonomy, participants in such coalitions keep their sensitive information including customer payments and cost structures unexposed during CTP. A route-based combinatorial auction inspired by column generation is proposed as request exchange mechanism for the CTP. It is tested on some newly generated instances with LTL pickup and delivery requests with time window restrictions. The CTP solutions are compared with those obtained by isolated planning without collaboration and by centralized planning. The results indicate that our mechanism is very efficient and effective in terms of realizing potential cost-savings by CTP, even when capacity limitations and restrictions on the exposure of information are explicitly considered.