Dynamic Capacity Allocation of Multi-Leg Railway Container Transportation Based on Bid-Price

Railway container transportation has been one of the fastest-growing freight transport modes. The reform of China Railway Freight Transportation provides an opportunity for the development of the railway container transportation. The current unified pricing mechanism does not reflect the market value of transport products. This paper presents a dynamic capacity allocation model for implementing market-oriented pricing of transport products. The model is used to adjust the different fare capacities according to market demand. Due to lots of stops along the railway container trains route, it will lead to dimensionality problems. The authors transfer the railway container multi-leg dynamic capacity allocation model to a deterministic linear programming problem. In addition, they compare and analyze the effectiveness of the additive bid-price control and the certainty equivalent control policy. Finally, they give a numerical experiment to show that the certainty equivalent control policy, which can ensure higher expected revenue, is better than the additive bid-price policy.