Choosing a servicing company’s strategy while interacting with freight owners at the road transport market

Abstract

Purpose. To develop the methodology for choosing the strategies of freight forwarding companies in the situation of interaction with freight owners as customers of forwarding services. Methodology. The game-theoretical approach is used to formalize the conflict situation between a freight forwarding company and a cargo owner. A set of services proposed by forwarders is used as the base in order to represent possible strategies of a forwarder as the vector of probabilities that the respective services are provided for a client. The strategies of the cargo owner are represented as a binary variable that shows whether the client uses the provided services or not. The payoff function for a forwarder is defined as the companys profit and the clients payoff function as fee paid for forwarding services. To determine the influence of the demand parameters on the forwarders optimal strategies, the demand for transport services is represented as a flow of requests characterized by two numeric parameters delivery distance and consignment weight. Findings. The conducted experimental studies have shown that as a result of the use of the proposed methodology, the optimal strategy of a forwarding company can always be determined from the payoff matrix. The performed simulation experiment allowed us to state that in most cases the forwarders optimal strategy is mixed (the technological and commercial services should be provided with the given probability while servicing the flow of requests from freight owners). Originality. The studies on the influence of the request flow parameters on the probabilities of choosing the elementary strategies are carried in the paper for the first time. Practical value. The proposed methodology can be used as the basic tool for supporting decisions of freight forwarders while servicing the cargo owners at the market of road freight transportation.