Study On The Competition And Cooperation Among Logistics Service Providers

The development of Internet has changed the consumer behavior, mainly reflecting in the popularity of online shopping. Then different patterns of online retailers, such as the B2C (e.g. www.jd.com) and C2C (e.g. www.taobao.com), are attracting more and more customers. Due to the nature of Internet retailing, i.e., spatial separation between the online retailers and customers, the fulfillment of this transaction must rely on the delivery service provided by logistics service providers (LSPs), including the logistics service provided by online store or third LSPs, and consumers must wait for a certain time before they receive parcels that were ordered online. The growing popularity of online shopping has driven a surge in express logistics. In recent years, many small and medium sized BEs have emerged, such as STO express, YTO express, SF express.The competition among LSPs is increasingly intensive, since the rapid development of private LSPs, the advantage of distribution networks of stated LSPs and the entry of foreign LSPs. Furthermore, the expectations for quality and service from customers are growing. Then the delivery cost increases. In addition, with the ascension of the online-shopping safety, and the popularization of network in remote areas (e.g., rural region in China), the demand for online-shopping from the remote areas is increasing, and the demand for express service correspondingly increases. However, most LSPs in China do not have distribution networks in the remote areas (such as rural region). Then LSPs should update the distribution range, and develop different strategies to try to reduce costs when designing their operations.Under the business environment described above, this thesis studies the LSPs’ decision of distribution range and collaborative distribution between two LSPs. The research topics are as follows.I. Study on the LSPs’ distribution range decisionAt present, in China, few LSPs have sound distribution networks which cover every corner, such as China Post, while other LSPs do not have distribution networks in the remote areas (such as rural region). However, with the ascension of the online-shopping safety, and the popularization of network in remote areas (e.g., rural region in China), the demand for online-shopping from the remote areas is increasing, and the demand for express service correspondingly increases. Therefore, in practice, LSPs must decide the distribution range with considering the service-level and competition, besides pricing, delivery frequency and vehicle routing. We consider two risk-neutral LSPs, and one LSP with sound distribution network which covers every corner is an existing company. Another LSP is a new player, which should determine the freight price and distribution range to compete for business. We use Stackelberg game to describe the competition between two LSPs, and divide into two cases to discuss, i.e. new LSP with higher speed and lower speed. By comparing the profits under different situation, we give the optimal distribution strategy for LSPs with lower and higher delivery speeds, and also provide the conditions for different distribution strategies.II. Study on the collaborative distribution between two LSPsThe increasing competition among LSPs and growing expectations for quality and service from customers, LSPs must develop different strategies to try to reduce costs when designing their operations. Establishing coalitions among LSPs can help extend their resource portfolios and reinforce their market positions. We probe the problem by combining competition-related decisions in the strategic hierarchy and cooperation in the operational hierarchy. Based on the difference in distribution ranges, we divide into two cases, i.e. LSPs with different ranges and same ranges, and explore the impacts of collaborative distribution on cost and delivery time. In chapter4, we study the horizontal cooperation between two LSPs with same distribution ranges, and focus on the impact of cooperation on delivery time. Furthermore, we design a transfer payment contract with fixed and variable fees to achieve a coordinated solution. In chapter5, we study the cooperation between these two types of LSPs with different distribution ranges by taking on Business Express (BE) and CP as examples, on the basis of the complementary advantages between the service advantages of business LSPs and the delivery range advantages of China Post.Based on the analysis provided above, the main innovations and contributions of this thesis are summarized as follows:(1) The first attempt to analyze the distribution range with considering service level and market competition, and give the optimal distribution strategy for LSPs with lower and higher delivery speeds, and also provide the conditions for different distribution strategies.(2) Enrich the knowledge of horizontal cooperation among LSPs by considering the features of demand network structure and setting a specific cost function and dividing into two cases based on the difference in distribution ranges, i.e. LSPs with different ranges and same ranges.(3) Explore the impact of cooperation on delivery time at the stage of parcel delivery, and find the negative influence of cooperation; i.e., the delivery time will be longer with collaborative distribution under some cases.(4) Design a transfer payment contract with fixed and variable fees to achieve a coordinated solution.