Abstract
This thesis examines the integration of dynamic pricing (DP) within the logistics sector, focusing on its potential to address inefficiencies in road freight transport. While DP has shown success in industries like hospitality and airlines, where it adjusts prices in real time to optimize revenue in response to demand fluctuations, its application in freight logistics is less common. Despite the critical role of road freight in supply chains, the industry faces issues like low vehicle load factors and frequent empty runs. This research posits that DP could enhance efficiency by improving vehicle utilization, thereby reducing costs and environmental impact.
The study highlights that while DP benefits in fixed-capacity industries are well-documented, logistics faces unique challenges such as fluctuating cargo volumes and complex routing requirements, which make demand forecasting more complicated. By focusing on a specific case, the wholesale diesel market in Sardinia, the research evaluates both the practicality of applying DP to logistics and customer perspectives on its implementation. In logistics, DP could, in theory, increase load factors and revenues by adjusting prices based on capacity and demand, but implementing DP in this context also raises concerns regarding fairness and price stability, as well as customer opinions on efficiency improvements.
A comprehensive literature review of DP across various sectors contextualizes its potential for logistics. Using a Systematic Literature Network Analysis (SLNA), the review aggregates findings from over a decade of DP research, detailing key benefits and limitations.
DP has been particularly beneficial in markets with limited capacity and short sales cycles, where real-time adjustments enable revenue gains and improvements of management capacity. However, these gains often come at a cost to customer satisfaction. Frequent price changes can lead to perceptions of unfairness, especially if customers feel prices are unpredictable or arbitrary. In industries like hospitality, transparent communication has been shown to help mitigate these perceptions, a finding that could apply similarly to logistics if DP is adopted.
The study empirical research employs a mixed-methods approach, combining surveys and semi-structured interviews to capture potential customer responses to DP in the Sardinian freight sector. This approach provides both quantitative and qualitative insights, revealing that while many customers are receptive to DP when it offers tangible benefits, such as extemporaneous discounts or work activity simplification, others express concerns about the possibility to accept offers from new suppliers. This reflects findings in other sectors, where customer trust and loyalty are justified by qualitative aspects beyond price. The study findings suggest that the success of DP in logistics may depend on transparent communication strategies to ensure customers understand and accept the pricing model.
Empirical data analysis indicates that customers favour DP when it is associated with value-driven benefits, such as lower prices during off-peak times, or when it clearly links to service quality improvements. However, the concern persists that unpredictable price shifts might impact customer satisfaction, particularly in logistics, where pricing stability is often valued. To mitigate these concerns, the study suggests that logistics providers implementing DP should focus on targeting gain-seekers and emphasize communication that clarifies the logic behind price adjustments.
In a broader context, this thesis contributes to the field by addressing a significant gap in DP literature concerning logistics, providing insights for academic researchers and industry managers alike. Academically, it expands DP theoretical application to a sector critical to global commerce. Managerially, it offers practical guidance for logistics firms considering DP, recommending a balance between operational efficiency and customer satisfaction to optimize outcomes. For logistics managers, ensuring transparency in DP implementation is crucial for building customer trust and confidence, as perceived fairness directly impacts customer retention and loyalty.
In conclusion, the thesis underscores that DP holds promise for transforming road freight logistics by increasing load factors, reducing empty runs, and lowering carbon emissions. However, its success will require addressing customer-oriented challenges unique to the logistics context. The findings suggest that logistics providers should adopt DP strategies that prioritize fairness and quality communication to foster positive customer perceptions. As DP continues to advance with the help of analytics and automation, its potential to improve efficiency and sustainability in logistics may reshape the sector’s role within the global supply chain.