A Bi-Level Model for Green Freight Transportation Pricing Strategy Considering Enterprise Profit and Carbon Emissions

Danzhu Wang, Lingyun Zhou, Huimin Zhang and Xiaokang Liang
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Danzhu Wang: Transportation & Economics Research Institute, China Academy of Railway Sciences Corporation Limited, Beijing 100081, China
Lingyun Zhou: Transportation & Economics Research Institute, China Academy of Railway Sciences Corporation Limited, Beijing 100081, China
Huimin Zhang: State Key Laboratory of Rail Traffic Control and Safety, Beijing Jiaotong University, Beijing 100044, China
Xiaokang Liang: Passenger Transport Department, China State Railway Group Corporation Limited, Beijing 100844, China

Sustainability, 2021, vol. 13, issue 12, 1-20

Abstract: Due to the impact of COVID-19, enterprises need effective pricing strategies to improve profits and viability. In order to fill research gaps in the literature relating to market competition among different freight modes and to adjust the freight transportation structure by optimizing transportation prices, we propose a multi-objective bi-level programming pricing model that considers market competition and the carbon emissions of the freight system in China. First, an objective function in upper-level planning was used to improve logistics enterprise profits and reduce the total carbon emissions of the freight system. Then, a generalized cost function for the freight transportation mode was designed to quantify the market competition among different transportation modes, and a user equilibrium assignment model was established to obtain the results of cargo flow assignment in lower-level planning. To solve the model, a sensitivity analysis algorithm was designed, and a logistics network example was used to verify the effectiveness of the model. The experimental results show that reasonable freight price adjustment can effectively increase enterprise profits and reduce the total carbon emissions of the freight system. In this paper, we provide a new method for freight pricing research, considering the market competition of multiple transportation modes, and provide a new idea for adjusting the transportation structure through freight price optimization, which will play a positive role in promoting the development of green freight.

Keywords: transportation cost; carbon emission; competitiveness; pricing strategy; bi-level programming (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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