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Logistics Outsourcing with Online Freight Platforms

In: Intelligent Logistics Management in Digital Economy

Author

Listed:
  • Feng Yang

    (University of Science and Technology of China)

  • Xiaolong Guo

    (University of Science and Technology of China)

  • Yugang Yu

    (University of Science and Technology of China)

Abstract

Online freight platforms (OFPs) are emerging and developing rapidly based on the Internet of Things and big data technologies. They provide professional logistics services by aggregating the scattered transportation capabilities of individual truck drivers. In China, for example, OFPs have integrated over 20% of trucking resources to offer shippers third-party logistics services and are more popular than traditional logistics service providers (TLSPs). This chapter studies a manufacturer’s production, distribution, and transportation of a product in bulk to a downstream firm via two transportation channels: TLSP and OFP. The two channels offer different operational modes, service levels, and contract prices. We develop a game-theoretical model to analyze the strategic interactions among the manufacturer, transportation service provider, and downstream firm. Our study highlights the implications for the manufacturer’s logistics outsourcing strategy with OFP and TLSP operations. We find that when an OFP is available, differences in transportation service levels and prices significantly affect the equilibrium decisions of the manufacturer and TLSP. Surprisingly, the emergence of OFPs does not necessarily threaten TLSP operations. This study guides manufacturers about their selection of shipping outsourcing strategies and provides new guidance for TLSP operations considering the emergence of OFPs.

Suggested Citation

  • Feng Yang & Xiaolong Guo & Yugang Yu, 2025. "Logistics Outsourcing with Online Freight Platforms," Springer Books, in: Intelligent Logistics Management in Digital Economy, chapter 0, pages 285-298, Springer.
    • Handle: RePEc:spr:sprchp:978-981-95-2177-7_15
    DOI: 10.1007/978-981-95-2177-7_15
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