EMIL - Exchange Mechanisms in Logistics

Low profit margins and the need to operate more sustainable put pressure on the logistics industry. As road transportation is a major contributor to emissions of harmful substances, public authorities demand for a more efficient use of vehicle capacities. In particular, the reduction of empty running vehicles is requested by different stakeholders. Such an increase in efficiency can be achieved by collaborative transportation, where available loading capacities are shared with competitors. In order to get rid of deadheads, logistics providers could, for instance, exchange transportation orders via digital platforms. Transport trading platforms are already at place, but the great potential of well- organized exchanges is far from being fully exploited. The EMIL project investigates how exchange mechanisms have to be designed in order to achieve efficient and fair allocations of transportation. In practical applications, the major hurdles lie in the area of information sharing and the allocation of costs and profits. The project team will tackle these issues by designing mechanisms where no sensitive data has to be shared, while players are incentivized to reveal necessary information in a truthful way. In particular the potential of auction- based systems in such a setting will be investigated. The objective is to generate bidding mechanisms, where efficient exchanges can be identified, while information on, for instance, costs or long-term customers do not have to be revealed to competitors. The project is also focusing on profit or cost sharing mechanisms, which are considered fair by all participating actors. Obviously, this is a major key to practical applicability of transport trading platforms. In order to evaluate potential efficiency increase, complex large-scale vehicle routing problems have to be computed. Hence, the project team will develop high-performant algorithms that will be used to conduct data-based studies for different mechanism designs. EMIL is embedded in the Sharing Economy paradigm and strives to answer the question, whether the respective concepts can be applied to increase efficiency in freight transportation. If successful, EMIL serves not only the transport industry but also the society.

Low profit margins and the need to operate more sustainable put pressure on the logistics industry. As road transportation is a major contributor to emissions of harmful substances, public authorities demand for a more efficient use of vehicle capacities. In particular, the reduction of empty running vehicles is requested by different stakeholders. Such an increase in efficiency can be achieved by collaborative transportation, where available loading capacities are shared with competitors. In order to get rid of deadheads, logistics providers could, for instance, exchange transportation orders via digital platforms. Transport trading platforms are already at place, but the great potential of well-organized exchanges is far from being fully exploited. The EMIL project investigated how exchange mechanisms have to be designed in order to achieve efficient and fair allocations of transportation. In practical applications, the major hurdles lie in the area of information sharing and the allocation of costs and profits. The project team tackled these issues by designing mechanisms where no or only little sensitive data has to be shared, while players are incentivized to reveal necessary information in a truthful way. In particular the potential of auction-based systems in such a setting were investigated. The project also generated insights on profit or cost sharing mechanisms, which are considered fair by all participating actors. Particularly, we analyzed if such systems are able to handle strategically acting players. Obviously, this is a major key to practical applicability of transport trading platforms. The project provided insights on how additional complexities, as narrow delivery time windows, can be integrated in efficient exchange mechanisms. By this EMIL successfully showed how to embed freight transportation within the Sharing Economy paradigm. Thus, it serves not only the transport industry but also the society.