Developing a Collaborative Planning Framework for Sustainable Transportation

Abstract

Currently, as being the highest petroleum consuming sector in the world, transportation significantly contributes to the total greenhouse gas emissions in the world. Road transportation not only is responsible for approximately 20% of the total emissions of carbon dioxide in the EU and in the US but also has a steadily increasing trend in contributing to global warming. Initiatives undertaken by authorities, such as Emission cap and trade in the EU, limit the emissions resulted from the actions of the companies and also give economic incentives to companies to reduce their emissions. However, in logistics systems with multiple entities, it is difficult to assess the responsibilities of the companies both in terms of costs and emissions. In this study, we consider a delivery network with multiple customers served by a single carrier, which executes a delivery plan with the minimum transportation cost, and allocate the resulting costs and the emissions among the customers in a fair manner. We develop allocation mechanisms for both costs and emissions. In order to develop a mechanism that provides further reduction of the emissions, we study a setting where the carrier takes the responsibility of the emissions and reflects the resulting inefficiencies while charging the customers.