Dynamic container drayage booking and routing decision support approach for E-commerce platforms

E-commerce drayage platforms are relatively new to the container drayage industry. Their revenue management poses an enormous logistical challenge owing to the unpredictable demand coupled with complex operations. In this paper, we propose a novel dynamic container drayage booking and routing problem with uncertain demand that incorporates important features of this emerging business model from the perspective of an e-commerce drayage platform. We formulate a multi-stage stochastic programming model for problem followed by developing an effective two-phase heuristic method based on a multi-scenario approach to derive both service booking and fleet routing solutions. In the two-phase heuristic, a container drayage service booking sub-problem is solved at the first phase to determine whether each request should be accepted for service or rejected, as well as the time period for serving the accepted requests, while a fleet routing sub-problem is tackled at the second phase to generate work schedules for the tractors and trailers to transport the containers. We conduct comprehensive computational experiments to demonstrate the quality and value of the proposed two-phase heuristic, and reveal insights into the practical operations management of e-commerce drayage platforms.