TY - JOUR
T1 - Efficient intermodal transportation auctions for B2B e-commerce logistics with transaction costs
AU - Xu, Su Xiu
AU - Cheng, Meng
AU - Huang, George Q.
N1 - Funding Information:
The authors acknowledge HKSAR RGC GRF Project (Grant No. 712513), National Natural Science Foundation of China (Grant No. 51405307), HKU Small Project Funding (Grant No. 201409176028), Zhejiang Provincial, Hangzhou Municipal, and Lin’an City governments for partial financial support for this research. The authors also thank the reviewers and editors for their critical but constructive comments.
Publisher Copyright:
© 2015 Elsevier Ltd.
PY - 2015/10/1
Y1 - 2015/10/1
N2 - We propose efficient intermodal transportation auctions for the B2B e-commerce logistics problem (ELP). This paper is among the first to consider transaction costs into auctions. In the ELP, the shipper is a B2B e-commerce platform by which a number of online orders between goods sellers and buyers are generated, and 3PLs (third-party logistics providers) can fulfill these online orders. The shipper bears transaction costs while goods sellers or buyers eventually pay intermodal services. We extend both Vickrey-Clarke-Groves (VCG) auction and primal-dual Vickrey (PDV) auction to the ELP where total logistics chain cost is minimized. The VCG-like auction realizes incentive compatibility, allocative efficiency, individual rationality, and budget balance for general valuations; while the PDV-like auction need presume the condition of seller-submodularity, which implies that the effect of each 3PL is decreasing when coalition increases. Computational results show that incorporating transaction costs leads to considerable cost saving for the shipper, shipper's group (that consists of the shipper herself, good sellers and buyers), and the logistics chain, as well as higher profitability for the group of 3PLs. As the variance of transaction costs increases, incorporating transaction costs leads to higher cost saving for the entities that matter to the shipper (i.e., herself, her group, and the logistics chain), and higher profitability for the group of 3PLs, regardless of valuation distribution type. Finally, we investigate the impact of self-interested shipper and the impact of the gap between intermodal service costs and transaction costs.
AB - We propose efficient intermodal transportation auctions for the B2B e-commerce logistics problem (ELP). This paper is among the first to consider transaction costs into auctions. In the ELP, the shipper is a B2B e-commerce platform by which a number of online orders between goods sellers and buyers are generated, and 3PLs (third-party logistics providers) can fulfill these online orders. The shipper bears transaction costs while goods sellers or buyers eventually pay intermodal services. We extend both Vickrey-Clarke-Groves (VCG) auction and primal-dual Vickrey (PDV) auction to the ELP where total logistics chain cost is minimized. The VCG-like auction realizes incentive compatibility, allocative efficiency, individual rationality, and budget balance for general valuations; while the PDV-like auction need presume the condition of seller-submodularity, which implies that the effect of each 3PL is decreasing when coalition increases. Computational results show that incorporating transaction costs leads to considerable cost saving for the shipper, shipper's group (that consists of the shipper herself, good sellers and buyers), and the logistics chain, as well as higher profitability for the group of 3PLs. As the variance of transaction costs increases, incorporating transaction costs leads to higher cost saving for the entities that matter to the shipper (i.e., herself, her group, and the logistics chain), and higher profitability for the group of 3PLs, regardless of valuation distribution type. Finally, we investigate the impact of self-interested shipper and the impact of the gap between intermodal service costs and transaction costs.
KW - Allocative efficiency
KW - E-commerce logistics problem (ELP)
KW - Intermodal transportation auctions
KW - Maritime transportation
KW - Mechanism design
KW - Transaction costs
UR - http://www.scopus.com/inward/record.url?scp=84940664729&partnerID=8YFLogxK
U2 - 10.1016/j.trb.2015.07.022
DO - 10.1016/j.trb.2015.07.022
M3 - Journal article
AN - SCOPUS:84940664729
SN - 0191-2615
VL - 80
SP - 322
EP - 337
JO - Transportation Research Part B: Methodological
JF - Transportation Research Part B: Methodological
ER -