Title: Cooperation between two logistics service providers with different distribution ranges

Authors: Feng Yang; Mingming Yang; Qiong Xia; Liang Liang

Addresses: School of Management, University of Science and Technology of China, No. 96 Jinzhai Road, Hefei 230026, Anhui Province, China ' School of Management, University of Science and Technology of China, No. 96 Jinzhai Road, Hefei 230026, Anhui Province, China ' School of Economics, Hefei University of Technology, No. 193 Tunxi Road, Hefei 230009, Anhui Province, China ' School of Management, University of Science and Technology of China, No. 96 Jinzhai Road, Hefei 230026, Anhui Province, China

Abstract: This paper focuses on the cooperation between two logistics service providers (LSPs) with different distribution ranges. Taking a business express (BE) and a state-owned LSP, i.e., China Post (CP) as examples, the cooperation situation between them and the non-cooperation situation are considered separately, and the two resulting profits are compared with each other. The results show that: 1) there is a complementation between the service advantages of BEs and the delivery range advantages of CP; 2) the proposed way of cooperation is conditionally able to save more manpower costs and increase profits; 3) the incremental profit has positive correlation with the demand from remote areas. Finally, a feasible consignment contract is also provided.

Keywords: horizontal cooperation; logistics service provides; LSPs; China; LSP cooperation; distribution ranges; manpower costs; profitability; incremental profit; remote areas; consignment contracts.

DOI: 10.1504/IJSTL.2017.082524

International Journal of Shipping and Transport Logistics, 2017 Vol.9 No.2, pp.186 - 201

Available online: 14 Jan 2017

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