Introducing competition in urban consolidation center freight allocation modeling

Abstract

Urban consolidation center (UCC) represents in many cities the most chosen solution by the local governments to reduce the negative impacts of city freight distribution. In order to achieve successful results, it is important to consider also the perspective of carriers with respect to the choice of facility location and the evaluation of costs. Therefore, in this paper we propose a simple approach to investigate the problem of flow distribution and choice of UCCs locations in situations of competition or cooperation among freight operators. In the first part of the paper, after presenting a brief explanation of the concept UCC, an overview of UCCs critical success factors is provided. This paper considers the modeling of competitive behavior among freight transport carriers into the optimization of urban freight distribution centers considering their incoming and outgoing flows. Three different types of scenarios are developed in order to represent different market situations of monopoly and duopoly competition in Cournot and von Stackelberg equilibriums. The outcomes of the model in terms of optimal configuration of UCCs, optimal distribution of freight flows, overall costs of the system and costs of carriers seem to be influenced by phenomena of competition, particularly in situations where a new competitor attempts to enter the market.