Truthful coordination at loading docks: A market design approach for transportation logistics (TRUCKS)

• Applicant: Dr. Paul Karänke
• Subject Area: Accounting and Finance
• Term: from 2018 to 2021
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 405008493

We study the design of electronic market mechanisms for the coordination of carriers in transportation logistics. Long waiting times at loading docks of retailers are a widespread phenomenon causing substantial inefficiencies in retail transportation logistics. The design of coordination mechanisms for such problems is challenging for two reasons: First, mechanisms should be resistant to manipulation and set incentives for truthful revelation of preferences for carriers. Secondly, if a mechanism is truthful, computing an efficient allocation of time slots is a combinatorial, computationally hard problem. The problem is representative for many computationally hard allocation problems with multiple decision makers as they arise in a networked economy.We compare existing combinatorial auction mechanisms to achieve coordination among carriers and develop extensions based on existing approximation approaches. We aim at an improved solution quality by leveraging results from research on near-optimal allocations. For most real-world problems one can find near-optimal solutions of combinatorial optimization problems for large instances very fast, while proving optimality is intractable.While auctions are common for truckload procurement, carriers' willingness to pay for loading dock reservations is low. The question arises if coordination can also be achieved without payments; i.e., with matching markets where resources are allocated without monetary transfers. Hence, we additionally analyze and extend existing work on matching with complementarities, which commonly approximates feasibility, and investigate the degree of average-case feasibility violations and efficiency.Due to uncertainties in travel and service times, we finally consider mechanisms that take changes of supply and demand in allocation decisions into account. We build on prior work on online coordination and investigate which mechanisms and approximation techniques can be applied to our settings.The resulting mechanisms should contribute to an important, yet challenging problem at the interface of information systems and operations research: the design of mechanisms that are resistant to strategic manipulation for computationally hard allocation problems. Progress in this area would have substantial impact far beyond the transportation logistics problem. Apart from our theoretical analyses, we aim at extensive numerical experiments based on field data available from previous cooperations with several industry partners.

• DFG Programme: Research Grants
• Co-Investigator: Professor Dr. Martin Bichler