Enabling Sustainable Freight Forwarding Network via Collaborative Games

TL;DR

This paper introduces Locally Collaborative Games, a new model for freight forwarding networks that uses game theory to fairly share profits among neighboring agents, improving resource utilization in fragmented markets.

Contribution

The paper proposes a novel class of collaborative games called Locally Collaborative Games and an efficient method to compute Shapley values for large-scale real-world freight networks.

Findings

The approach significantly outperforms existing methods in computational efficiency.

Locally Collaborative Games effectively model real-world freight forwarding collaborations.

The method enhances resource utilization in fragmented freight markets.

Abstract

Freight forwarding plays a crucial role in facilitating global trade and logistics. However, as the freight forwarding market is extremely fragmented, freight forwarders often face the issue of not being able to fill the available shipping capacity. This recurrent issue motivates the creation of various freight forwarding networks that aim at exchanging capacities and demands so that the resource utilization of individual freight forwarders can be maximized. In this paper, we focus on how to design such a collaborative network based on collaborative game theory, with the Shapley value representing a fair scheme for profit sharing. Noting that the exact computation of Shapley values is intractable for large-scale real-world scenarios, we incorporate the observation that collaboration among two forwarders is only possible if their service routes and demands overlap. This leads to a new class of collaborative games called the Locally Collaborative Games (LCGs), where agents can only collaborate with their neighbors. We propose an efficient approach to compute Shapley values for LCGs, and numerically demonstrate that our approach significantly outperforms the state-of-the-art approach for a wide variety of network structures.