Online Transportation Markets: Performance Models and Real-Time Fleet Operational Strategies

University Of Texas At Austin, Austin TX

Investigators

Abstract

Transportation systems involve complex interactions among multiple resources, such as humans, vehicles, shipments, information and infrastructure. Transportation systems must increasingly operate in a highly dynamic environment, characterized by considerable stochasticity and unpredictability, to serve customers demanding ever more exacting service levels. For example, the kind of customer-responsive, made-to-order manufacturing that has been a major factor in the spectacular global success of companies such as Dell Computers, has shifted the logistics and transportation process from one that relies on long planned lead times to an extremely dynamic, short-term driven process. It is well recognized that information and communication technologies (ICT) are changing many aspects of the way in which business is conducted, though the full implications for transportation systems structure and operations continue to unfold. Explosive growth in electronic commerce and virtual integrated supply chains through the Internet create huge information flows that allow and require dynamic adjustments in the markets underlying the physical movement of goods. A significant change may be taking place in the structure of the transportation market, with the development of auction markets for transportation services, in the form of Internet sites that match shipments (shippers' demand) and transportation capacity (carriers' offer). The development of these virtual hubs where shippers and carriers meet may have deep implications for the structure and efficiency of the transportation system. The complex relations that may emerge from the interaction of shippers, carriers, and intermediaries in auction sites may rapidly transform the virtual logistic net in the short term, and the way infrastructure and equipment is used and operated in the long term. These developments also have implications for the kinds of methodologies to both analyze the performance of such systems, as well as to incorporate these mechanisms in the operational decisions of both carriers and shippers (and/or their agents). In addition to analyzing the performance of auction markets for transportation services, which would allow us to address several questions articulated in the proposal, this research will conduct exploratory development of methodological approaches to support fleet operators' decision-making processes in this environment, and examine the implications for shippers' experienced service levels. These challenges will be addressed in the particular context of the dynamic operation of vehicle fleets to provide highly responsive service to a general pattern of stochastic time-sensitive customer loads. Matching of demands to supply is assumed to take place at least partially through an auction market mechanism. These problem classes are distinct from conventional static deterministic problems as well as their time-dependent and probabilistic extensions. This class of problems includes truckload and less-than-truckload trucking, intermodal and integrated shipping, as well as traveling repairman and dynamic inventory-routing problems. This award is made under the Exploratory Research on Engineering the Transport Industries (ETI) program solicitation.