Linking with smart transportation system under emergency disruptions: a “resilience-triangle” analysis

The rise of smart transportation system offers new opportunities to enhance urban logistics resilience, as the system can effectively mitigate delivery delays caused by emergencies such as extreme weather and traffic disruptions. Otherwise, suppliers/brands have to bear a recovery cost, which is formulated by a “resilience-triangle” structure. In this study, to investigate the decision-makers’ incentive to link with the smart transportation system, we develop a multi-stage game analysis model in which one supplier/brand sells products through both an offline retail channel with pre-stock and an on-demand delivery channel suffering from delay costs under emergencies. Interestingly, we find that without the linkage with the smart transportation system, the supplier may reduce on-demand sales and lower the wholesale price charged to the offline retailer to reduce the losses caused by emergencies. This makes the supplier better off without linkage with the smart transportation system, even when emergencies cause extremely severe delays in the on-demand channel. Ultimately, the supplier’s preference for the smart transportation system may switch twice: as delay time increases, the supplier’s optimal strategy shifts from not linking with the smart transportation system to linking with it, and then back to not linking with it.