A multi-criteria analysis for the case of carriers having clear visibility into future demand for their freight delivery services

Abstract

Carriers providing truckload freight delivery services can find value in having visibility into future demand for their services to deliver shipments (a.k.a. loads). In the extant literature, the predicted value of this visibility is improved profitability for carriers. We extend this literature by showing that profit is not the only criterion for assessing this visibility (termed future load visibility (FLV) herein). Through extensive computational experiments, we model the effects of FLV on carrier profits as well as on three other criteria that matter to other stakeholders in freight transport ecosystems: (i) ecological consequences of freight transport; (ii) customer service for freight consignors/consignees; (iii) prices that consignors pay for freight delivery. In addition to providing a multi-criteria analysis of FLV, another major novelty of our work is in showing that the level of inter-carrier competition factors into how FLV affects the various criteria. A particularly significant insight from our investigation of situations involving such competition is the seemingly paradoxical finding that carriers’ FLV possession can sometimes impede better outcomes on non-profit criteria. This and other findings yield the paper’s central conclusion that while the decision to acquire FLV is more evidently justified on the profit criterion, it is not an unequivocally optimal decision when non-profit criteria are considered.