IDEAS home Printed from https://ideas.repec.org/a/eee/transe/v140y2020ics1366554520306219.html
   My bibliography  Save this article

E-commerce shipping through a third-party supply chain

Author

Listed:
  • Ponce, Diego
  • Contreras, Ivan
  • Laporte, Gilbert

Abstract

We consider an e-commerce retailer who must ship orders from a warehouse to a set of customers with delivery deadlines. As is often the case, the retailer uses a third-party service provider to ensure its distribution. The retailer can enter the supply chain of the service provider at various levels. Entering it at a higher level entails lower sorting costs for the retailer, but higher delivery costs, and longer delivery times. The customer orders arrive at various moments over a rolling planning horizon. This means that the retailer must also make consolidation decisions. We model and solve the static and dynamic cases of this problem. The static case is modeled as an integer linear program and solved by CPLEX. We develop and compare four shipping policies for the dynamic case. Extensive computational results based on real location data from California and Texas are reported.

Suggested Citation

  • Ponce, Diego & Contreras, Ivan & Laporte, Gilbert, 2020. "E-commerce shipping through a third-party supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 140(C).
    • Handle: RePEc:eee:transe:v:140:y:2020:i:c:s1366554520306219
    DOI: 10.1016/j.tre.2020.101970
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1366554520306219
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tre.2020.101970?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Qin, Hu & Zhang, Zizhen & Qi, Zhuxuan & Lim, Andrew, 2014. "The freight consolidation and containerization problem," European Journal of Operational Research, Elsevier, vol. 234(1), pages 37-48.
    2. Lafkihi, Mariam & Pan, Shenle & Ballot, Eric, 2019. "Freight transportation service procurement: A literature review and future research opportunities in omnichannel E-commerce," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 125(C), pages 348-365.
    3. Camilo Ortiz-Astorquiza & Ivan Contreras & Gilbert Laporte, 2019. "An Exact Algorithm for Multilevel Uncapacitated Facility Location," Transportation Science, INFORMS, vol. 53(4), pages 1085-1106, July.
    4. Aguezzoul, Aicha, 2014. "Third-party logistics selection problem: A literature review on criteria and methods," Omega, Elsevier, vol. 49(C), pages 69-78.
    5. Cheng, Xi & Gou, Qinglong & Yue, Jinfeng & Zhang, Yan, 2019. "Equilibrium decisions for an innovation crowdsourcing platform," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 125(C), pages 241-260.
    6. Jayaram, Jayanth & Tan, Keah-Choon, 2010. "Supply chain integration with third-party logistics providers," International Journal of Production Economics, Elsevier, vol. 125(2), pages 262-271, June.
    7. Ulmer, Marlin W. & Soeffker, Ninja & Mattfeld, Dirk C., 2018. "Value function approximation for dynamic multi-period vehicle routing," European Journal of Operational Research, Elsevier, vol. 269(3), pages 883-899.
    8. Mariam Lafkihi & Shenle Pan & Eric Ballot, 2019. "Freight transportation service procurement: A literature review and future research opportunities in omnichannel E-commerce," Post-Print hal-02086154, HAL.
    9. Tyan, Jonah C. & Wang, Fu-Kwun & Du, Timon C., 2003. "An evaluation of freight consolidation policies in global third party logistics," Omega, Elsevier, vol. 31(1), pages 55-62, February.
    10. Satır, Benhür & Erenay, Fatih Safa & Bookbinder, James H., 2018. "Shipment consolidation with two demand classes: Rationing the dispatch capacity," European Journal of Operational Research, Elsevier, vol. 270(1), pages 171-184.
    11. Li, Guo & Zhang, Xuefeng & Liu, Mengqi, 2019. "E-tailer’s procurement strategies for drop-shipping: Simultaneous vs. sequential approach to two manufacturers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 130(C), pages 108-127.
    12. Yu, Dennis Z. & Cheong, Taesu & Sun, Daewon, 2017. "Impact of supply chain power and drop-shipping on a manufacturer’s optimal distribution channel strategy," European Journal of Operational Research, Elsevier, vol. 259(2), pages 554-563.
    13. Berbeglia, Gerardo & Cordeau, Jean-François & Laporte, Gilbert, 2010. "Dynamic pickup and delivery problems," European Journal of Operational Research, Elsevier, vol. 202(1), pages 8-15, April.
    14. Hemmelmayr, Vera C. & Doerner, Karl F. & Hartl, Richard F., 2009. "A variable neighborhood search heuristic for periodic routing problems," European Journal of Operational Research, Elsevier, vol. 195(3), pages 791-802, June.
    15. Hanbazazah, Abdulkader S. & Abril, Luis & Erkoc, Murat & Shaikh, Nazrul, 2019. "Freight consolidation with divisible shipments, delivery time windows, and piecewise transportation costs," European Journal of Operational Research, Elsevier, vol. 276(1), pages 187-201.
    16. Stenius, Olof & Marklund, Johan & Axsäter, Sven, 2018. "Sustainable multi-echelon inventory control with shipment consolidation and volume dependent freight costs," European Journal of Operational Research, Elsevier, vol. 267(3), pages 904-916.
    17. Anna Franceschetti & Ola Jabali & Gilbert Laporte, 2017. "Rejoinder on: Continuous approximation models in freight distribution management," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 25(3), pages 443-444, October.
    18. Daganzo, Carlos F., 1984. "The length of tours in zones of different shapes," Transportation Research Part B: Methodological, Elsevier, vol. 18(2), pages 135-145, April.
    19. Anna Franceschetti & Ola Jabali & Gilbert Laporte, 2017. "Continuous approximation models in freight distribution management," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 25(3), pages 413-433, October.
    20. ORTEGA , Francisco & WOLSEY, Laurence A., 2003. "A branch-and-cut algorithm for the single-commodity, uncapacitated, fixed-charge network flow problem," LIDAM Reprints CORE 1611, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    21. Hu, Weihong & Toriello, Alejandro & Dessouky, Maged, 2018. "Integrated inventory routing and freight consolidation for perishable goods," European Journal of Operational Research, Elsevier, vol. 271(2), pages 548-560.
    22. Tang, Christopher S. & Veelenturf, Lucas P., 2019. "The strategic role of logistics in the industry 4.0 era," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 129(C), pages 1-11.
    23. Chung-Yee Lee & Sila Çetinkaya & Wikrom Jaruphongsa, 2003. "A Dynamic Model for Inventory Lot Sizing and Outbound Shipment Scheduling at a Third-Party Warehouse," Operations Research, INFORMS, vol. 51(5), pages 735-747, October.
    24. Ayanso, Anteneh & Diaby, Moustapha & Nair, Suresh K., 2006. "Inventory rationing via drop-shipping in Internet retailing: A sensitivity analysis," European Journal of Operational Research, Elsevier, vol. 171(1), pages 135-152, May.
    25. Mercedes Landete & Gilbert Laporte, 2019. "Facility location problems with user cooperation," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 27(1), pages 125-145, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Belieres, Simon & Hewitt, Mike & Jozefowiez, Nicolas & Semet, Frédéric, 2021. "A time-expanded network reduction matheuristic for the logistics service network design problem," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 147(C).
    2. Romero-Silva, Rodrigo & Mujica Mota, Miguel, 2022. "Trade-offs in the landside operations of air cargo hubs: Horizontal cooperation and shipment consolidation policies considering capacitated nodes," Journal of Air Transport Management, Elsevier, vol. 103(C).
    3. Arkadiusz Kawa, 2021. "Fulfilment as Logistics Support for E-Tailers: An Empirical Studies," Sustainability, MDPI, vol. 13(11), pages 1-11, May.
    4. Yu, Hao & Huang, Min & Chao, Xiuli & Yue, Xiaohang, 2022. "Truthful multi-attribute multi-unit double auctions for B2B e-commerce logistics service transactions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 164(C).
    5. Özarık, Sami Serkan & Veelenturf, Lucas P. & Woensel, Tom Van & Laporte, Gilbert, 2021. "Optimizing e-commerce last-mile vehicle routing and scheduling under uncertain customer presence," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 148(C).
    6. Sindi, Safaa & Woodman, Roger, 2021. "Implementing commercial autonomous road haulage in freight operations: An industry perspective," Transportation Research Part A: Policy and Practice, Elsevier, vol. 152(C), pages 235-253.
    7. Wei, Bo & Çetinkaya, Sıla & Cline, Daren B.H., 2023. "Inbound replenishment and outbound dispatch decisions under hybrid shipment consolidation policies: An analytical model and comparison," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 175(C).
    8. Peng He & Tong-Yuan Wang & Qi Shang & Jun Zhang & Henry Xu, 2024. "Knowledge mapping of e-commerce supply chain management: a bibliometric analysis," Electronic Commerce Research, Springer, vol. 24(3), pages 1889-1925, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Peng, Xiaoshuai & Zhang, Lele & Thompson, Russell G. & Wang, Kangzhou, 2023. "A three-phase heuristic for last-mile delivery with spatial-temporal consolidation and delivery options," International Journal of Production Economics, Elsevier, vol. 266(C).
    2. Hanghang Zhu & Zhi Pei, 2023. "Two-Stage Robust Liner Container Booking with Uncertain Customer Demand," Mathematics, MDPI, vol. 11(8), pages 1-24, April.
    3. Jaller, Miguel & Pahwa, Anmol, 2020. "Analytical Modeling Framework to Assess the Economic and Environmental Impacts of Residential Deliveries, and Evaluate Sustainable Last-Mile Strategies," Institute of Transportation Studies, Working Paper Series qt4143j4pr, Institute of Transportation Studies, UC Davis.
    4. Alexander M. Stroh & Alan L. Erera & Alejandro Toriello, 2022. "Tactical Design of Same-Day Delivery Systems," Management Science, INFORMS, vol. 68(5), pages 3444-3463, May.
    5. Janjevic, Milena & Merchán, Daniel & Winkenbach, Matthias, 2021. "Designing multi-tier, multi-service-level, and multi-modal last-mile distribution networks for omni-channel operations," European Journal of Operational Research, Elsevier, vol. 294(3), pages 1059-1077.
    6. Marlin Ulmer & Martin Savelsbergh, 2020. "Workforce Scheduling in the Era of Crowdsourced Delivery," Transportation Science, INFORMS, vol. 54(4), pages 1113-1133, July.
    7. Arslan, Okan, 2021. "The location-or-routing problem," Transportation Research Part B: Methodological, Elsevier, vol. 147(C), pages 1-21.
    8. Andersson, Jonas & Malmberg, Filip & Marklund, Johan, 2023. "Exact analysis of One-Warehouse-Multiple-Retailer inventory systems with quantity restricted deliveries," European Journal of Operational Research, Elsevier, vol. 309(3), pages 1161-1172.
    9. Fontaine, Pirmin & Minner, Stefan & Schiffer, Maximilian, 2023. "Smart and sustainable city logistics: Design, consolidation, and regulation," European Journal of Operational Research, Elsevier, vol. 307(3), pages 1071-1084.
    10. Hanbazazah, Abdulkader S. & Abril, Luis & Erkoc, Murat & Shaikh, Nazrul, 2019. "Freight consolidation with divisible shipments, delivery time windows, and piecewise transportation costs," European Journal of Operational Research, Elsevier, vol. 276(1), pages 187-201.
    11. Schaumann, Sarah K. & Bergmann, Felix M. & Wagner, Stephan M. & Winkenbach, Matthias, 2023. "Route efficiency implications of time windows and vehicle capacities in first- and last-mile logistics," European Journal of Operational Research, Elsevier, vol. 311(1), pages 88-111.
    12. Zhang, Juan & Campbell, James F. & Sweeney, Donald C., 2024. "A continuous approximation approach to integrated truck and drone delivery systems," Omega, Elsevier, vol. 126(C).
    13. Banerjee, Dipayan & Erera, Alan L. & Stroh, Alexander M. & Toriello, Alejandro, 2023. "Who has access to e-commerce and when? Time-varying service regions in same-day delivery," Transportation Research Part B: Methodological, Elsevier, vol. 170(C), pages 148-168.
    14. Guo, Chaojie & Thompson, Russell G. & Foliente, Greg & Kong, Xiang T.R., 2021. "An auction-enabled collaborative routing mechanism for omnichannel on-demand logistics through transshipment," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 146(C).
    15. Baller, Annelieke C. & Dabia, Said & Dullaert, Wout E.H. & Vigo, Daniele, 2019. "The Dynamic-Demand Joint Replenishment Problem with Approximated Transportation Costs," European Journal of Operational Research, Elsevier, vol. 276(3), pages 1013-1033.
    16. Di Huang & Weiping Tong & Lumeng Wang & Xun Yang, 2019. "An Analytical Model for the Many-to-One Demand Responsive Transit Systems," Sustainability, MDPI, vol. 12(1), pages 1-17, December.
    17. Matsui, Kenji, 2020. "Optimal bargaining timing of a wholesale price for a manufacturer with a retailer in a dual-channel supply chain," European Journal of Operational Research, Elsevier, vol. 287(1), pages 225-236.
    18. Dellbrügge, Marius & Brilka, Tim & Kreuz, Felix & Clausen, Uwe, 2022. "Auction design in strategic freight procurement," Chapters from the Proceedings of the Hamburg International Conference of Logistics (HICL), in: Kersten, Wolfgang & Jahn, Carlos & Blecker, Thorsten & Ringle, Christian M. (ed.), Changing Tides: The New Role of Resilience and Sustainability in Logistics and Supply Chain Management – Innovative Approaches for the Shift to a New , volume 33, pages 295-325, Hamburg University of Technology (TUHH), Institute of Business Logistics and General Management.
    19. Li, Lin & Li, Guo, 2023. "Integrating logistics service or not? The role of platform entry strategy in an online marketplace," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 170(C).
    20. Li, Zhaojin & Liu, Ya & Yang, Zhen, 2021. "An effective kernel search and dynamic programming hybrid heuristic for a multimodal transportation planning problem with order consolidation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 152(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transe:v:140:y:2020:i:c:s1366554520306219. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.