Assessing Service Quality,Switching Costs and Customer Loyalty in Home‐Delivery Services in Taiwan

Abstract

This study empirically investigated service quality, switching costs and customer loyalty from home‐delivery services' customers' perceptive. With regard to service quality attributes, findings indicated that customers were most satisfied with ‘range of delivery’, followed by ‘seldom loses parcels’, ‘invoice accuracy’, ‘prompt and reliable collection’ and ‘delivery by due time’. They were least satisfied with competitiveness of price. A structural equation modelling (SEM) approach was employed to analyse the impact of service quality and switching costs on customer loyalty from customers' perspective. Results revealed that service quality positively influenced switching costs and customer loyalty, and switching costs had a positive effect on customer loyalty. Investigation of the moderating effect of switching costs on the relationship between service quality and customer loyalty indicated that it was significantly important. Theoretical and practical implications of the findings for firms providing home‐delivery services are discussed.     

Quantifying environmental and financial benefits of using porters and cycle couriers for last-mile parcel delivery

Parcel carriers face increasingly difficult operating conditions in busy metropolitan areas due to growing consumer demand for ever faster delivery services and having to cope with traffic congestion and city authority measures that may restrict or penalise access for certain types of vehicle. This paper evaluates the potential environmental and financial benefits of switching from traditional van-based deliveries to an alternative operating model, where porters or cycle couriers undertake deliveries supported by a substantially reduced van fleet.Results using a specially-developed algorithm to model operations of a real carrier in an area of central London, UK, suggested that the carrier could reduce CO₂ emissions by 45%, NOx emissions by 33%, driving distance by 78% and curbside parking time by 45%. Overall cost savings to the carrier were estimated to be in the range 34–39%. Scaling up the modelled emissions savings to London’s Central Activities Zone, an area of approximately 30 km² and with current total annual parcel delivery distance of around 15 million km, could see annual emissions savings in the region of 2 million kg CO₂ and 1633 kg NOx if all carriers utilised porters or cycle couriers. The key operating challenges identified were related to sorting and consolidating items by weight and volume, parcel handover arrangements and how to deal with express items and failed deliveries.     

Just-in-time delivery for green fleets: A feedback control approach

With increasing attention being paid to greenhouse gas (GHG) emissions, the transportation industry has become an important focus of approaches to reduce GHG emissions, especially carbon dioxide equivalent (CO₂e) emissions. In this competitive industry, of course, any new emissions reduction technique must be economically attractive and contribute to good operational performance. In this paper, a continuous-variable feedback control algorithm called GEET (Greening via Energy and Emissions in Transportation) is developed; customer deliveries are assigned to a fleet of vehicles with the objective function of Just-in-Time (JIT) delivery and fuel performance metrics akin to the vehicle routing problem with soft time windows (VRPSTW). GEET simultaneously determines vehicle routing and sets cruising speeds that can be either fixed for the entire trip or varied dynamically based on anticipated performance. Dynamic models for controlling vehicle cruising speed and departure times are proposed, and the impact of cruising speed on JIT performance and fuel performance are evaluated. Allowing GEET to vary cruising speed is found to produce an average of 12.0–16.0% better performance in fuel cost, and −36.0% to +16.0% discrepancy in the overall transportation cost as compared to the Adaptive Large Neighborhood Search (ALNS) heuristic for a set of benchmark problems. GEET offers the advantage of extremely fast computational times, which is a substantial strength, especially in a dynamic transportation environment.     

Scheduling railway freight delivery appointments using a bid price approach

This paper proposes a method for establishing aggressive but achievable delivery appointment times for railroad shipments, taking into account individual customer needs and forecasted available train capacity. The concept of scheduling appointment times is directly patterned after current motor carrier industry practice, so that customers can plan for rail or truck deliveries in the same way.A shipment routing problem is decomposed into a deterministic “dynamic car scheduling” (DCS) process for shipments already accepted and a stochastic “train segment pricing” (TSP) process for forecasting future demands which have not yet called in and for which delivery appointments have yet to be scheduled. Both are formulated as multi-commodity network flow (MCNF) problems, where each shipment is treated as a separate commodity. Gain coefficients represent recapture probabilities that a specific customer will accept a carrier’s service offer.A comparison with a widely used revenue management formulation is given. A Lagrangian heuristic for obtaining a primal solution is also described. The problem is solved within a 1% gap using the subgradient algorithm.     

Combining pickups and deliveries in vehicle routing – An assessment of carbon emission effects

This paper studies the effect on carbon emissions of consolidation of shipments on trucks. New positioning and communication technologies, as well as decision support systems for vehicle routing, enable better utilization of vehicle capacity, reduced travel distance, and thereby carbon emission reductions. We present a novel carbon emission analysis method that determines the emission savings obtained by an individual transport provider, who receives customer orders for outbound deliveries as well as pickup orders from supply locations. The transport provider can improve vehicle utilization by performing pickups and deliveries jointly instead of using separate trucks. In our model we assume that the transport provider minimizes costs by use of a tool that calculates detailed vehicle routing plans, i.e., an assignment of each transport order to a specific vehicle in the fleet, and the sequence of customer visit for each vehicle. We compare a basic set-up, in which pickups and deliveries are segregated and performed with separate vehicles, with two consolidation set-ups where pickups and deliveries may be mixed more or less freely on a single vehicle. By allowing mixing, the average vehicle load will increase and the total driven distance will decrease. To compare carbon emissions for the three set-ups, we use a carbon assessment method that uses the distance driven and the average load factor. An increase in the load factor can reduce part of the emission savings from consolidation. We find that emission savings are relatively large in case of small vehicles and for delivery and pickup locations that are relatively far from the depot. However, if a truck visits many demand and supply locations before returning to the depot, we observe negligible carbon emission decreases or even emission increases for consolidation set-ups, meaning that in such cases investing in consolidation through joint pickups and deliveries may not be effective. The results of our study will be useful for transport users and providers, policymakers, as well as vehicle routing technology vendors.     

Comparison of energy demands of drone-based and ground-based parcel delivery services

Drones are one of the most intensively studied technologies in logistics in recent years. They combine technological features matching current trends in transport industry and society like autonomy, flexibility, and agility. Among the various concepts for using drones in logistics, parcel delivery is one of the most popular application scenarios. Companies like Amazon test drones particularly for last-mile delivery intending to achieve both reducing total cost and increasing customer satisfaction by fast deliveries. As drones are electric vehicles, they are also often claimed to be an eco-friendly mean of transportation.In this paper an energy consumption model for drones is proposed to describe the energy demand for drone deliveries depending on environmental conditions and the flight pattern. The model is used to simulate the energy demand of a stationary parcel delivery system which serves a set customers from a depot. The energy consumed by drones is compared to the energy demand of Diesel trucks and electric trucks serving the same customers from the same depot.The results indicate that switching to a solely drone-based parcel delivery system is not worthwhile from an energetic perspective in most scenarios. A stationary drone-based parcel delivery system requires more energy than a truck-based parcel delivery system particularly in urban areas where customer density is high and truck tours are comparatively short. In rather rural settings with long distances between customers, a drone-based parcel delivery system creates an energy demand comparable to a parcel delivery system with electric trucks provided environmental conditions are moderate.     

Integrated scheduling of m-truck,m-drone,and m-depot constrained by time-window,drop-pickup,and m-visit using constraint programming

The idea of deploying unmanned aerial vehicles, also known as drones, for final-mile delivery in logistics operations has vitalized this new research stream. One conceivable scenario of using a drone in conjunction with a traditional delivery truck to distribute parcels is discussed in earlier literature and termed the parallel drone scheduling traveling salesman problem (PDSTSP). This study extends the problem by considering two different types of drone tasks: drop and pickup. After a drone completes a drop, the drone can either fly back to depot to deliver the next parcels or fly directly to another customer for pickup. Integrated scheduling of multiple depots hosting a fleet of trucks and a fleet of drones is further studied to achieve an operational excellence. A vehicle that travels near the boundary of the coverage area might be more effective to serve customers that belong to the neighboring depot. This problem is uniquely modeled as an unrelated parallel machine scheduling with sequence dependent setup, precedence-relationship, and reentrant, which gives us a framework to effectively consider those operational challenges. A constraint programming approach is proposed and tested with problem instances of m-truck, m-drone, m-depot, and hundred-customer distributed across an 8-mile square region.     

Understanding the impact of e-commerce on last-mile light goods vehicle activity in urban areas: The case of London

Growth in e-commerce has led to increasing use of light goods vehicles for parcel deliveries in urban areas. This paper provides an insight into the reasons behind this growth and the resulting effort required to meet the exacting delivery services offered by e-retailers which often lead to poor vehicle utilisation in the last-mile operation, as well as the duplication of delivery services in urban centres as competitors vie for business. A case study investigating current parcel delivery operations in central London identified the scale of the challenge facing the last-mile parcel delivery driver, highlighting the importance of walking which can account for 62% of the total vehicle round time and 40% of the total round distance in the operations studied. The characteristics of these operations are in direct conflict with the urban infrastructure which is being increasingly redesigned in favour of walking, cycling and public transport, reducing the kerbside accessibility for last-mile operations. The paper highlights other pressures on last-mile operators associated with managing seasonal peaks in demand; reduced lead times between customers placing orders and deliveries being made; meeting delivery time windows; first-time delivery failure rates and the need to manage high levels of product returns. It concludes by describing a range of initiatives that retailers and parcel carriers, sometimes in conjunction with city authorities, can implement to reduce the costs associated with last-mile delivery, without negatively impacting on customer service levels.     

Inferring patterns in the multi-week activity sequences of public transport users

The public transport networks of dense cities such as London serve passengers with widely different travel patterns. In line with the diverse lives of urban dwellers, activities and journeys are combined within days and across days in diverse sequences. From personalized customer information, to improved travel demand models, understanding this type of heterogeneity among transit users is relevant to a number of applications core to public transport agencies’ function. In this study, passenger heterogeneity is investigated based on a longitudinal representation of each user’s multi-week activity sequence derived from smart card data. We propose a methodology leveraging this representation to identify clusters of users with similar activity sequence structure. The methodology is applied to a large sample (n = 33,026) from London’s public transport network, in which each passenger is represented by a continuous 4-week activity sequence. The application reveals 11 clusters, each characterized by a distinct sequence structure. Socio-demographic information available for a small sample of users (n = 1973) is combined to smart card transactions to analyze associations between the identified patterns and demographic attributes including passenger age, occupation, household composition and income, and vehicle ownership. The analysis reveals that significant connections exist between the demographic attributes of users and activity patterns identified exclusively from fare transactions.     

Equilibria of bilateral taxi–customer searching and meeting on networks

This paper proposes an equilibrium model to characterize the bilateral searching and meeting between customers and taxis on road networks. A taxi driver searches or waits for a customer by considering both the expected searching or waiting time cost and ride revenue, and a customer seeks a taxi ride to minimize full trip price. We suppose that the bilateral taxi–customer searching and meeting occurs anywhere in residential and commercial zones or at prescribed taxi stands, such as an airport or a railway station. We propose a meeting function to spell out the search and meeting frictions that arise endogenously as a result of the distinct spatial feature of the area and the taxi–customer moving decisions. With the proposed meeting function and the assumptions underlying taxi–customer search behaviors, the stationary competitive equilibrium achieved at fixed fare prices is determined when the demand of the customers matches the supply of taxis or there is market clearing at the prevailing searching and waiting times in every meeting location. We establish the existence of such an equilibrium by virtue of Brouwer’s fixed-point theorem and demonstrate its principal operational characteristics with a numerical example.     

道路客运小件快运车辆路径和调度研究

制约小件运输发展的瓶颈之一是站到站运输与客户门到门需求之间的矛盾,目前道路客运企业正大力发展门到门的取送货业务,但缺少一套切实可行的取送货运输组织调度方案,基于此,文章建立了考虑客户时效性需求的车辆路径调度数学模型并设计了一种改进的遗传算法进行求解。通过实例证明该算法可以求得满意解,为道路客运企业发展小件快运的"最后一公里"取送货服务提供运输组织调度方案参考。     

Anticipating emission-sensitive traffic management strategies for dynamic delivery routing

Traffic pollution is an increasing challenge for cities. Emissions such as nitrogen dioxides pose a major health threat to the city’s inhabitants. These emissions often accumulate to critical levels in local areas of the city. To react to these critical emission levels, cities start implementing dynamic traffic management systems (TMS). These systems dynamically redirect traffic flows away from critical areas. These measures impact the travel speeds within the city. This is of particular importance for parcel delivery companies. These companies deliver goods to customers in the city. To avoid long delivery times and higher costs, companies already adapt their routing with respect to changing traffic conditions. Still, a communication with the TMS may allow anticipatory planning to avoid potentially critical areas in the city. In this paper, we show how communication between TMS and delivery companies results in benefits for both parties. To exploit the provided information, we develop a dynamic routing policy anticipating potential future measures of the TMS. We analyze our algorithm in a comprehensive case study for the TMS of the city of Braunschweig, Germany, a city often used as reference for a typical European city layout. We show that for the delivery company, integrating the TMS’ information in their routing algorithms reduces the driving times significantly. For the TMS, providing the information results in less traffic in the polluted areas.     

Optimizing express parcel networks and delivery schemes subject to timeliness tolerances

The ‘first come first served’ (FCFS) strategy usually adopted by air express companies does not consider delivery time tolerances and induces underuse of some facilities. This study relaxes the time tolerances and tackles the issue of parcel deliveries and transport network design for an express delivery company. In other words, it determines simultaneously the route loops of company-owned cargo aircraft, the amount of cargo space chartered for each link and the parcel delivery paths. Using a case study in which parcels must be delivered between 14 cities served by the SF Air Express Company, we find that FCFS is not the best approach for minimizing costs and that express companies can optimize both their delivery schemes and networks subject to some relaxed time tolerances.     

Reducing carbon emission of pickup and delivery using integrated scheduling

Integrated scheduling is a powerful way to reduce carbon emission of pickup and delivery because the vehicle loading efficiency can be improved. Our study investigates theoretically the potential carbon emission reduction brought by integrated scheduling, and develops the upper and lower bounds. To demonstrate the practical advantage of carbon emission reduction brought by integrated scheduling, we use the real application of pickup and delivery, i.e., “picking up and delivering customers to airport” (PDCA). Using based-on-set-partitioning formulation, we accurately obtain the minimal carbon emissions of non-integrated scheduling and integrated scheduling. We conclude that integrated scheduling reduces carbon emission by approximate 10.8%. However, the cost in integrated scheduling may be more than before, which causes a company unwilling to accept integrated scheduling. The acceptable integrated scheduling is proposed. We identify the situations under which carbon emission can be efficiently reduced in acceptable integrated scheduling based on the extensive experiments of PDCA.     

Autonomous cars: The tension between occupant experience and intersection capacity

Systems that enable high levels of vehicle-automation are now beginning to enter the commercial marketplace. Road vehicles capable of operating independently of real-time human control under an increasing set of circumstances will likely become more widely available in the near future. Such vehicles are expected to bring a variety of benefits. Two such anticipated advantages (relative to human-driver vehicle control) are said to be increased road network capacity and the freeing up of the driver-occupant’s time to engage in their choice of leisurely or economically-productive (non-driving) tasks.In this study we investigate the implications for intersection capacity and level-of-service of providing occupants of automated (without real-time human control), autonomously-operating (without vehicle-to-X communication) cars with ride quality that is equivalent (in terms of maximum rates of longitudinal and lateral acceleration) to two types of rail systems: [urban] light rail transit and [inter-urban] high-speed rail. The literature suggests that car passengers start experiencing discomfort at lower rates of acceleration than car drivers; it is therefore plausible that occupants of an autonomously-operating vehicle may wish to instruct their vehicle to maneuver in a way that provides them greater ride comfort than if the vehicle-control algorithm simply mimicked human-driving-operation.On the basis of traffic microsimulation analysis, we found that restricting the dynamics of autonomous cars to the acceleration/deceleration characteristics of both rail systems leads to reductions in a signalized intersection’s vehicle-processing capacity and increases in delay. The impacts were found to be larger when constraining the autonomous cars’ dynamics to the more-restrictive acceleration/deceleration profile of high-speed rail. The scenarios we analyzed must be viewed as boundary conditions, because autonomous cars’ dynamics were by definition never allowed to exceed the acceleration/deceleration constraints of the rail systems. Appropriate evidence regarding motorists’ preferences does not exist at present; establishing these preferences is an important item for the future research agenda.This paper concludes with a brief discussion of research needs to advance this line of inquiry.     

The effect of work-related factors on the bicycle commute mode choice in the Netherlands

Increasing the number of people cycling to work brings a number of benefits: it can lead to reductions in air pollution and traffic jams, and increases people’s physical activity levels. We investigated the extent to which work-related factors influence (1) whether an individual decides to cycle to work, and (2) whether an individual cycles to work every day. It is anticipated that the office culture and colleagues’ and employers’ attitudes would significantly influence both decisions. These factors are expected to impact the provision of cycling facilities and financial compensation schemes in the workplace. We conducted an Internet survey in 4 Dutch municipalities, gathering data from over 4,000 respondents. The results suggest that the following factors increase the likelihood of being a commuter cyclist: having a positive attitude towards cycling; colleagues’ expectations that an individual will cycle to work; the presence of bicycle storage inside; having access to clothes changing facilities; and needing a bicycle during office hours. The presence of facilities for other transport modes, an increase in the commute distance, and the need to transport goods, in turn, reduces the chance that an individual will cycle. Cycling frequency is negatively affected, meanwhile, by an increase in commute distance, a free public transport pass or car parking provided by the employer. These results indicate that an individual’s working situation affects the commuting cycling behaviour. The findings also indicate that (partly) different variables influence an individual’s decision to cycle to work, and their decision to cycle every day.     

Why do people fare evade? A global shift in fare evasion research

ABSTRACT

Fare evasion is a significant concern for most transit authorities. The traditional approach to fare compliance has focussed on modifying the physical control of ticketing or ticket inspection rates. Yet recently the perspective on fare evasion has begun to shift toward profiling the fare evader or understanding the customer motivations to fare evade. This paper uses a literature review method to document the characteristics of these three perspectives on fare evasion: the conventional transit system perspective, the customer profiling perspective and the customer motivations perspective. We find that the conventional transit system perspective, although straightforward to measure and control, has its limits particularly in “open” transit systems. The customer profiling perspective attempts to identify, based on demographics, which customers are more likely to fare evade. However this perspective has little use beyond profiling and is ethically questionable. The customer motivations perspective provides a richer understanding of how customers define fare evasion and what attitudes, social norms and circumstances motivates them to fare evade. Considering that between 20% and 40% of a city’s residents admit to fare evading at some point, understanding these complex motivations can help improve revenue compliance at a time when most governments heavily subsidise their transit systems.     

Route design for last-in,first-out deliveries with backhauling

The retail route design problem extends the capacitated vehicle routing problem with time windows by introducing several operational constraints, including order loading and delivery restrictions (last-in, first-out), order-dependent vehicle capacity, material handling limits at the warehouse, backhauling, and driving time bounds. In this paper, the problem is modeled on a directed network for an application associated with a major grocery chain. Because the corresponding mixed-integer program proved too difficult to solve with commercial software for real instances, we developed a greedy randomized adaptive search procedure (GRASP) augmented with tabu search to provide solutions. Testing was done using data sets provided Kroger, the largest grocery chain in the US, and benchmarked against a previously developed column generation algorithm. The results showed that cost reductions of $4887 per day or 5.58% per day on average, compared to Kroger’s corresponding solutions.     

Social welfare analysis of investment public–private partnership approaches for transportation projects

This paper has two objectives: (i) to introduce a new approach in order to gain widespread support for road pricing; and (ii) to develop a detailed social welfare analysis for road pricing schemes. We first describe our novel approach that stimulates public support for road pricing, which we refer to as an investment public–private partnership, or IP3. This approach returns a significant portion of the economic value created by road pricing back to the citizens who own the newly priced facility. We then present a social welfare framework that estimates the benefits and costs of using the IP3 approach on an urban transportation network. A P3 project’s impact on overall social welfare provides a more comprehensive evaluation criterion than the often-used Value for Money (VfM) analysis. Apart from several theoretical studies, a detailed social welfare analysis that includes all major P3 project stakeholders is absent from the literature. We use Fresno, California as our case study in order to conduct a welfare analysis on IP3s. Our results show that system-optimal tolling favors average users, but that government—and consequently taxpayers—should pay for costly tolling systems (negative profits). In contrast, unlimited profit-maximizing tolls raise substantial profits for government, for the infrastructure’s citizen-owners, and for the private sector, but the average user is worse off. From a social-welfare perspective, one should search for a Pareto improvement under which all major stakeholders are better off. Our estimates indicate that a mixed public and private tolling scheme offers such an improvement.