A Game-Theoretic Approach for Modeling the Competition in Freight Railway and Roadway Transportation Market

In this study, the problem of competition in freight transportation market is considered by applying a game-theoretic approach. The roadway and the multi-modal transportation systems, as two main logistic agents competing in the market, are investigated, where the latter consists of both roadway and railway transportation modes. Moreover, two different scenarios represented by flexible and inflexible railway organizations are regarded. The game structure of the first scenario is based on Nash equilibrium; while the second one has the Stackelberg (leader-follower) equilibrium structure. The transportation prices for both roadway and multi-modal systems and the travel time of multi-modal system are as the decision variables of the problem. For each of the two scenarios, the freight transportation market is modeled and based on that, the impacts of different technical and economic policies on the competitive market are analyzed. By applying the policy of increasing the fuel cost, the travel time of multi-modal system, and both demand and profit of roadway system are decreased. The policy of reducing loading/unloading costs in multi-modal system causes reduction in equilibrium transportation price of both systems, as well as reduction in demand and profit of roadway system. The policy of decreasing investment cost coefficient to improve the travel time of multi-modal system leads to reduction in demand and profit of roadway system. The policy of employing the modern trucks with low fuel consumption rate results in reduction of transportation price for both systems, and increase of travel time of multi-modal system. The obtained results of this study can be used for transportation policy regulators and managers, who provide the railway and roadway freight transportation services.