Analyzing the Competitiveness of Intermodal Road-Rail Transport through the Lens of Cumulative Prospect Theory

Abstract

Due to the long-standing government pricing system implemented by the railway, the market-oriented reform mechanism for freight transportation pricing remains imperfect.As a result, Intermodal Road-rail Transport (IRRT) has not fully utilized its advantages in the market competition against the Truck-Only Transport (TOT) mode.This paper addresses the limited rationality of decision makers and considers the interests of shippers and carriers in order to enhance the competitiveness of IRRT.To tackle the uncertainty associated with transportation costs, including economic and time costs, a two-layer programming model is employed.The upper layer model focuses on maximizing the operator's profit, while the lower layer model captures the equilibrium freight volume resulting from the shippers' choice behavior when competing modes reach equilibrium.In order to construct the competitiveness model accurately of IRRT, the study integrates the principles of cumulative prospect theory (CPT).Finally, the model is solved using a heuristic algorithm based on sensitivity analysis, presenting a fresh perspective for the steady development of IRRT.

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