Enabling carrier collaboration via order sharing double auction: A Singapore urban logistics perspective

A recent exploratory study on the collaborative urban logistics in Singapore suggests that cost reduction and privacy preservation are two main drivers that would motivate the participation of carriers in consolidating their last mile deliveries. With Singapore's mild restrictions on the vehicle types or the time windows for the last-mile delivery, the authors believe that with proper technology in place, an Urban Consolidation Center like the Tenjin Joint Distribution System in Fukuoka Japan may be implemented to achieve cost reduction with some degree of privacy preservation. Participating carriers keep their respective private orders and have the option to get their remaining shareable orders consolidated with those from the other carriers’ fleet. To this end, the authors propose in this paper a double auction mechanism that enables such consolidation with an objective to maximize the total cost savings attained by all participating carriers. The experimental results on 5 zones of delivery in Singapore central business district (CBD) demonstrate that the proposed double auction is able to bring about reductions in the number of inter-zone travels, thereby producing cost savings to the participating carriers.