Intermodal transportation of full and empty containers in harbor-inland regions based on revenue management

Abstract

Introduction: The transport of full containers and repositioning of empty containers are essential for the operation of a container logistic enterprise. In a large inland region, railway and road transportation take their own advantages for container transportation in terms of transport efficiency and costs. The combination of the two modes creates larger possibility for logistic enterprise to provide efficient service and reduce operation costs. Thus, this paper aims to optimize the inland intermodal transportation of full and empty containers. Methods: Different from cost minimum model, an integer programming model is proposed based on revenue management, making the model more reasonable in practice where logistic enterprises have the right to reject transportation demands from customers considering transport profits and capacity limitations. The real cases of transportation networks of Northeast China and parts of the southern Europe are applied to evaluate and describe the model and performance. Results: The results indicate that the proposed intermodal transportation optimization for both full and empty containers is feasible and profitable for logistic enterprises. The efficiency of container usage increases since we take the conversion of containers during transportation into account. Results also imply an inappropriate pricing strategy at certain inland depots in the case. Conclusions: This paper provides an optimization method for the intermodal transportation of full and empty containers in harbor-inland regions / hinterlands. Different from cost minimization in the literature, this paper models the transportation problem based on revenue management. That is, the model aims to maximize profits of logistic enterprise with the specific constraints in container transportation, as well as demand rejection. The model is proofed to be feasible in the real transportation networks and can create more profits for transportation enterprises. The analysis of real cases show that the total profits can be enlarged by considering the conversion of containers during transportation. In addition, it is verified that the optimization of inland transportation of empty and full containers reduces the operating costs of logistic enterprises. Moreover, results uncover the fact that a governed pricing policy at Suifenhe is not reasonable and may deteriorate the future export environment there. For the case based on part of southern Europe, it seems that the port, customer, inland transport operator and possibly container shipping company in Europe may benefit by establishing appropriate inland depots.