Evolutionary Carrier Selection for Shared Truck Delivery Services

TL;DR

This paper introduces a stochastic evolutionary game model to analyze customer carrier selection and vehicle routing in shared truck delivery services, accounting for irrational decision-making and market dynamics.

Contribution

It presents a novel integrated game-theoretic framework combining vehicle routing and customer choice models for LTL delivery markets.

Findings

Stable states depend on carrier and customer parameters

Irrational decision-making influences market equilibrium

Numerical analysis reveals parameter impacts on stability

Abstract

With multiple carriers in a logistics market, customers can choose the best carrier to deliver their products and packages. In this paper, we present a novel approach of using the stochastic evolutionary game to analyze the decision-making of the customers using the less-than-truckload (LTL) delivery service. We propose inter-related optimization and game models that allow us to analyze the vehicle routing optimization for the LTL carriers and carrier selection for the customers, respectively. The stochastic evolutionary game model incorporates a small perturbation of customers' decision-making which exists due to irrationality. The solution of the stochastic evolutionary game in terms of stochastically stable states is characterized by using the Markov chain model. The numerical results show the impact of carriers' and customers' parameters on the stable states.