Article
Optimal pricing and terminal location for a rail–truck intermodal service – a case study
To be competitive with other modes of transport, railways need to be cost-effective. In order to become more competitive in the logistics sector, Indian Railways has taken new initiatives to improve their operations in recent years. A rail–truck intermodal transportation service for Indian Railways is described in this paper. The main focus of the research presented in this paper is on the joint optimisation of freight rate and terminal location in order to minimise the total shipping cost of truckers so that they will use the intermodal service, while meeting the railway’s profitability targets. A model has been developed for determination of the optimal freight rate and the corresponding intermodal terminal location. The key regulators of this model are the price sensitivity of the trucker and the profit guarantee for the railways. A case study was developed relating to the Delhi–Mumbai freight corridor in India and analysis was undertaken to gain insight into the trade-offs among terminal locations and shipment cost.
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