A Decentralized, Smart Market Solution to a Class of Back-Haul Transportation Problems: Concept and Experimental Test Beds

Back-haul problems occur in many areas of transportation. One-way rental often takes equipment, such as cases and containers, from an area of high demand to an area of low demand. The problem is to return the equipment to the location of need, a problem typically viewed as an administrative and scheduling problem. We developed a decentralized approach in which a specially designed market organizes competition and information to minimize the cost of back-hauls without the direct intervention of administrative negotiations or command-and-control types of scheduling. We employed laboratory experimental methods to test the concept, examine its performance against theoretical benchmarks, and explore its limitations.