Pricing intermodal freight transport services: A cost-plus-pricing strategy

Reference:
L. Li, X. Lin, R.R. Negenborn, and B. De Schutter, "Pricing intermodal freight transport services: A cost-plus-pricing strategy," in Computational Logistics (Proceedings of the 6th International Conference on Computational Logistics (ICCL'15), Delft, The Netherlands, Sept. 2015) (F. Corman, S. Voß, and R.R. Negenborn, eds.), Lecture Notes in Computer Science, Cham, Switzerland: Springer, ISBN 978-3-319-24263-7, pp. 541-556, 2015.

Abstract:
This paper investigates transport services pricing problems faced by intermodal freight transport operators with fixed transport capacities in an intermodal freight transport network. We first present an optimal intermodal freight transport planning model to minimize the total transport cost. This model captures modality change phenomena, due time requirements, and the possibility to subcontract transport demands. A cost-plus-pricing strategy is proposed to determine the service price as the sum of the operational cost and the targeted profit margins of transport operators under different transport scenarios, i.e., self-transporting, subcontracting, and a combination of them. For the reference transport demand specified by a customer, a list of service packages with different due times, demand sizes, and the determined service prices will be offered to the customer. Based on the urgency of delivering containers and the prices of different service packages, the customer will make the final selection decisions. A case study is given to illustrate the planning model and our proposed pricing strategy.