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An On-Demand Same-Day Delivery Service Using Direct Peer-to-Peer Transshipment Strategies

Author

Listed:
  • Wei Zhou

    (Jingdong (JD.com) Silicon Valley R&D Center)

  • Jane Lin

    (University of Illinois at Chicago
    University of Illinois at Chicago)

Abstract

As the same-day delivery service becomes increasingly popular among e-commerce customers, it demands fast, cheap, and flexible on-demand delivery service. This paper proposes, formulates, and evaluates a new on-demand, same-day delivery (ODSD) strategy using direct peer-to-peer transshipment (P2PT). P2PT involves package relays among multiple couriers to extend beyond the normal service range of a single courier; this is done directly via effective collaboration and coordination among couriers. Three P2PT variants are investigated in this paper: P2PT-1 with one single inter-zonal ODSD service request (pickup and delivery in two different service zones), P2PT-M with multiple inter-zonal ODSD requests, and P2PT-RT with real-time inter-zonal demand. An adaptive boundary relaxation (ABR) heuristic algorithm is proposed and evaluated for its solution performance. The P2PT delivery paradigm is also compared with the most responsive and naive ODSD strategy of direct shipping. It is found that while P2PT tends to incur longer travel time than direct shipping, it provides the ODSD service without having to expand and maintain a larger fleet of vehicles (and thus drivers) or incurring extra labor cost. As the economy of scale of ODSD demand increases, those advantages of P2PT will only become more prominent. Our investigations have also found that the efficiency of P2PT, measured by the additional travel time incurred per ODSD service request, improves initially with the economy of scale, and then seems to flatten out in the static demand scenario or worsen in the real-time demand scenario as the number of service requests increases.

Suggested Citation

  • Wei Zhou & Jane Lin, 2019. "An On-Demand Same-Day Delivery Service Using Direct Peer-to-Peer Transshipment Strategies," Networks and Spatial Economics, Springer, vol. 19(2), pages 409-443, June.
    • Handle: RePEc:kap:netspa:v:19:y:2019:i:2:d:10.1007_s11067-018-9385-2
    DOI: 10.1007/s11067-018-9385-2
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