Urban Consolidation Center or Peer‐to‐Peer Platform? The Solution to Urban Last‐Mile Delivery

• DOI: 10.1111/poms.13289
• Publication Date: 2020-10-22T03:26:21Z
• Authors: Qiyuan Deng; Xin Fang; Yun Fong Lim
• Keywords: Last mile (transportation); Consolidation

The growing population in cities and booming e‐commerce activities create huge demand for urban last‐mile delivery, exerting intense pressure on the cities’ well‐being. To keep congestion pollution under control, a consolidator can operate an consolidation center (UCC) to bundle shipments from multiple carriers before delivery. Alternatively, peer‐to‐peer platform share delivery capacity. We provide guidance choose between these two business models by comparative analysis. capture interactions using game‐theoretical framework. Under each model, first decides price of service maximize her expected profit. Each carrier then observes his task volume, whether deliver own or use consolidator's minimize cost. UCC become more dependent as their variable cost increases. supply capacity are balanced equilibrium. Between models, is profitable than if only carriers’ sufficiently large. Moreover, becomes dominant there carriers. also efficient mitigating negative social‐environmental impact many Otherwise, performs better.