Last-mile deliveries in urban areas often raise environmental and social issues in Singapore and urban cities worldwide. As the e-commerce market and urban logistics spending continue to grow globally (and locally), the social aspect of this trend i.e. congestion and environmental pollution needs to be addressed.
We envision a collaborative urban logistics eco-system that addresses the various aspects of last-mile delivery, from the suppliers through urban consolidation centres to end point (B2C, B2B and O2O) deliveries.
The eMarket platform, an online auction system, aims to address targeted aspects of B2B and B2C Collaborative Urban Logistics in large cities. It allows logistics companies to either auction their last mile delivery services, or to bid for delivery jobs.
Our approach has a strong sharing economy flavour. It provides a single point of entry for goods going into the city, where demand and supply are pooled together. Shippers simply submit delivery requests to the eMarket platform which will assign these requests to its pool of resources, as efficiently as possible by consolidating less-than-truck-load deliveries, while respecting regulatory and operational restrictions, service level requirements and maximising profits. The objective is to balance environmental sustainability with economic viability through efficient allocation of resources, by enabling prices to be discovered through free interactions between demand and supply, through an auction mechanism.
Technology Features, Specifications and Advantages
The eMarket system is an online platform that intelligently and fairly matches shippers’ orders (delivery requests) to transporters’ resources (vehicles) through an innovative double auction market mechanism.
The double auction model is an extension of the standard auction model where supply and demand are matched in a manner similar to a spot market. In this model, a shipper, with orders to be delivered, creates bids for the orders by specifying offer prices for the bids. Multiple orders may be grouped in a single bid, and a single offer price is specified for the bid.
The available shipper bids are then broadcast in the eMarket platform, and transporters will bid for jobs to fulfil. There are two types of auctions:
Capacity-based Auction: The transporter is indifferent to shipper bids. Transporter specifies the availability (time, capacity, constraints, etc.) of vehicle(s) together with its cost structure
Job-based Auction: Transporter sees available shipper bids and but not their prices. Transporter bids for the orders it is willing to fulfil, together with an asking price for each order
The auction engine clears the auction by solving a Winner Determination optimization problem that maximises profit (considering shipper bids, transporter costs, platform operator profit margin) subject to service level agreement to be delivered by the platform operator (i.e. delivery fulfilment rate). The system will produce a match of winning bids and the associated price for each winning bid.
eMarket platform can be applied to the logistic sector locally and globally for any B2B, B2C and C2C business processes, to address last-mile deliveries in urban areas. It enables logistics companies to either auction their last mile delivery services or to bid for delivery jobs.
The capacity-based and job-based auction engines enable prices to be discovered through free interactions between demand and supply to achieve optimum efficiency, hence efficient allocation of resources.
Overall benefit includes improved demand and supply matching of freight delivery, hence improved service level and reduce congestion on the roads
Shippers (demand) can benefit from price savings, and gain access to more transporter options
Transporters can maximize utilisation of vehicles (supply) at maximum profit, reducing less-than-full truck load situations; reduce fuel consumption and carbon footprint