Research on Differential Pricing and Train Operation Decisions for Railway Cargo Transportation Under Competitive Conditions

Railway freight operations aim not only to market themselves aggressively to capture the market in a competitive environment but also to achieve refined management. The operational decisions chosen by carriers can have a significant impact on the revenue across freight services. Nowadays, various forms of transported products, train make-up, and schedules are developed from the perspective of production convenience, with less consideration of shippers' needs for the time utility, frequency, and tariffs of transportation services. This paper investigates a joint optimization approach to railroad operation planning that combines meeting the transport demand preferences of different shippers in a competitive environment. Considering the heterogeneity of shippers' transportation demands and the competitive environment with freight trucking, a new bi-level programming model is proposed that incorporates pricing decisions and operational planning policies, such as car blocking, train routing, and make-up. An exact solution for this model is developed by adding valid inequalities to the mixed-integer formula and the experiment is conducted with data from bulk coal cargo transportation of the S Railway Bureau Group Corp. A simple transportation network is presented, and the calculation results of the pricing decisions that maximize the profit in each operation decision in this network are reported.