Strategic alliance in freight consolidation

The utilization of unfilled space in dispatching trucks requires collaboration among aligned partners. We consider two collaboration modes: strategic alliance and full collaboration, where outbound shipments could be reassigned among the partnering agents in freight consolidation with shipment delivery deadline. The effects of partnership are studied in an economic model where the product substitutability in price setting and discount offer are introduced. We adopt a simulation approach to find the optimal shipment dispatching plan in collaborative freight consolidation. A comprehensive analysis is presented to identify those factors which affect profit performance and collaboration decisions. (c) 2010 Elsevier Ltd. All rights reserved.