EconPapers    
Economics at your fingertips  
 

Airfreight forwarding under system-wide and double discounts

Samir Elhedhli (), Zichao Li and James H. Bookbinder
Additional contact information
Samir Elhedhli: University of Waterloo
Zichao Li: University of Waterloo
James H. Bookbinder: University of Waterloo

EURO Journal on Transportation and Logistics, 2017, vol. 6, issue 2, No 3, 165-183

Abstract: Abstract We consider the shipment consolidation and freight forwarding problem under two discount schemes: the system-wide and the double-discount. In the system-wide scheme, the cost associated with one flight does not only depend on the quantity of freight assigned to that flight, but also on the total freight assigned to other flights operated by the same carrier. In the double-discount scheme, there are cost savings based on the quantity shipped on a given flight on top of the system-wide discount. We propose models based on multi-commodity network flow formulations that take into account practical aspects such as cargo unsplitability, shipment volume and over-declaration. We propose solution methodologies based on Lagrangrean relaxation and local branching. Numerical testing reveals the efficiency of the approaches presented and sheds light on some managerial implications. We find that freight forwarders do not only reduce costs from the system-wide and the double-discount schemes, but are also likely to engage with fewer airlines, thus reducing administrative fees.

Keywords: Transportation; System-wide discount; Double discount; Lagrangian relaxation; Column generation; Local branching; Network planning (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s13676-015-0093-5 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:eurjtl:v:6:y:2017:i:2:d:10.1007_s13676-015-0093-5

Ordering information: This journal article can be ordered from
http://www.springer. ... search/journal/13676

DOI: 10.1007/s13676-015-0093-5

Access Statistics for this article

EURO Journal on Transportation and Logistics is currently edited by Michel Bierlaire

More articles in EURO Journal on Transportation and Logistics from Springer, EURO - The Association of European Operational Research Societies
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2025-03-20
Handle: RePEc:spr:eurjtl:v:6:y:2017:i:2:d:10.1007_s13676-015-0093-5