Cooperation between two logistics service providers with different distribution ranges

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.