An efficient system of incentivizing truck drivers to accept night loads

Night deliveries are increasingly used by motor carriers to cut costs, but many carriers struggle to secure night truck drivers because many drivers dislike night driving. Monetary incentives are offered to drivers to accept night loads, but the incentive system currently used in practice is inefficient, as it not only pays more incentives than necessary but also does not incentivize the right drivers, both of which increase costs. This paper develops a new incentive system that allows carriers to secure night drivers at lower costs. Based on the interviews conducted with seven motor carriers, as well as the analysis of large night delivery data, we propose a bi-level programming approach that (1) generates a unique incentive for each driver based on his/her night driving performance, and (2) implicitly aligns the incentive paid to each driver with his/her reservation price. Simulation experiments conducted with real-world data showed that by using our approach carriers can not only avoid over-incentivizing drivers, but also (1) incentive only the right set of drivers who can bring cost savings and (2) encourage other drivers to improve night driving. Results also showed that our approach may give cost savings of up to 2.5% over the current system.