Efficient intermodal transportation auctions for B2B e-commerce logistics with transaction costs

Su Xiu Xu, Meng Cheng and George Q. Huang

Transportation Research Part B: Methodological, 2015, vol. 80, issue C, 322-337

Abstract: 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.

Keywords: E-commerce logistics problem (ELP); Mechanism design; Intermodal transportation auctions; Maritime transportation; Transaction costs; Allocative efficiency (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0191261515001691
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:transb:v:80:y:2015:i:c:p:322-337

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_1&version=01

DOI: 10.1016/j.trb.2015.07.022

Access Statistics for this article

Transportation Research Part B: Methodological is currently edited by Fred Mannering

More articles in Transportation Research Part B: Methodological from Elsevier
Bibliographic data for series maintained by Catherine Liu ().