Intermodal Network Services: Value of Information and Pricing

Past event — 5 June 2013

Kühne Logistics University
Grosser Grasbrook 17, 20457 Hamburg

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Prof. Rob Zuidwjik


Rotterdam School of Management, Erasmus University (RSM)


During the presentation, two topics will be discussed. First of all, we discuss the value of information in container transport. Planning the transport of maritime containers from the sea port to final inland destinations is challenged by uncertainties regarding the time the container is released for further transport and the transit time from the port to its final destination. This paper assesses the value of information in container transport in terms of efficiency and reliability. The analysis uses a stylized single period model where a decision maker allocates released containers to two transport modes (slow, low price, no flexible departure times versus fast, high price, flexible departure times), where the decision maker plans the departure time of the inflexible mode. We construct Pareto frontiers and the corresponding Pareto optimal decisions under various information scenarios and show that the Pareto frontiers move in a favorable direction when the level of information increases. The mathematical results are explained and illustrated by means of a numerical example involving barge transport. We also study the impact of erroneous information on efficiency and reliability based on a numerical analysis.
Second, we discuss joint pricing and design of intermodal network services. We consider a deep sea terminal operating company (TOC) that also operates a set of inland terminals which connects with the main seaport terminal by means of frequent high capacity transport modes such as rail and barge. We discuss a mathematical model that supports joint design and pricing decisions on the network. The model is formulated as a bi-level MIP mathematical program. At the first level, the TOC maximizes its net revenues by designing its hinterland network and by setting the tariffs which will apply for the services offered to the users of its network. At the second level, the total logistics costs faced by the users on the total network are minimized by determining the flows through the network. The model incorporates flow dependent economies of scale and transit time constraints. A novel heuristic that effectively solves this NP-hard problem is presented. Finally, the managerial relevance of this model is shown by some stylized examples that highlight how our model differs from the conventional hub and spoke network design models.
In the beginning of the talk, a brief will be given about the activities of Erasmus Smart Port Rotterdam.

About the Presenter

Rob Zuidwijk is an associate professor of supply chain management at Rotterdam School of Management, Erasmus University (RSM) and a full professor of freight transport and traffic networks at the Department of Civil Engineering and Geosciences, Delft University of Technology. He is also the academic director of Erasmus Smart Port Rotterdam.
Professor Zuidwijk's main research interests are in freight transport and supply chain management, with a particular focus on international logistics and ports, sustainability, and the role of information as an enabler. He has also worked on closed loop supply chains and product life cycle management.

more info about the Prof. Rob Zuidwijk

About the Seminar

The KLU research seminar series is a regular meeting of PhD students, Post-Docs and professors who conduct research in the field of logistics and supply chain management. The research seminar is open to the public and we happily welcome guests.