Proceedings of ICLT 2025

COMPETITIVE LOCATION OF COLLECTION DELIVERY POINTS IN LAST-MILE LOGISTICS

Thitinan Pholsook

School of Transportation Engineering, Institute of Engineering, Suranaree University of Technology, Thailand

International Conference on Logistics & Transport 2025, Tokyo, Japan, pp. 89-97

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Abstract

Purpose: This paper focuses on the last-mile service market within an e-commerce context, involving two existing firms that operate self-collection and delivery services—pickup shops and automated parcel lockers. The analysis is conducted within a competitive location framework, where a follower firm is aware of a leader's existing facility locations and strategies. The follower's objective is to maximize profit by opening new service points. The proposed model aims to identify the optimal locations for the follower's new facilities and determine the most appropriate facility type—either a pickup shop or an automated parcel locker. Design/methodology/approach: To model customer choice behaviour, Huff's gravity-based model is employed to estimate the probability that customers will patronise a given collection and delivery point. The problem is formulated as an integer nonlinear programming model, which is solved for a representative instance using a branch-and-bound algorithm. This approach facilitates the determination of optimal placement strategies for the follower in a dynamic urban logistics environment. Findings: The results indicate that the follower's profit and market share can be increased significantly through strategic expansion, leading to a corresponding decline in the leader's performance. Numerical results demonstrate that the follower's profit increases by approximately 53.8%, while the leader's profit decreases by 56.2%. The follower gains a 28% share of the

Keywords

Competitive location; Last-mile delivery; Collection-delivery point; Huff’s rule

Citation

Thitinan Pholsook (2025). COMPETITIVE LOCATION OF COLLECTION DELIVERY POINTS IN LAST-MILE LOGISTICS. Proceedings of the International Conference on Logistics & Transport (ICLT 2025), Tokyo, Japan, pp. 89-97.