Decision models for on-premises parcel lockers service revenue management
Year: 2025
Type: article
Abstract: On-premises Parcel Lockers (OPLs) have recently garnered attention as a convenient, safe, and secure parcel delivery solution in urban areas. Companies like Amazon Hub, GroundFloor, and My Parcel Locker have adopted basic Service Revenue Models (SRMs), providing OPLs in buildings under different contract arrangements, such as subscription models, annual partnership fees, etc. However, high capital and ongoing costs impede the adoption of OPLs for small buildings. This study aims to develop advanced decision models for the revenue management of on-premises parcel locker by developing extensions to the basic SRM. The extensions function by incorporating the concept of carriers paying a service fee and buildings receiving services through partnership agreements. Two distinct partnership scenarios are evaluated: (i) a building host the OPL while serving the neighbouring buildings and (ii) collaboration with the local government where authorities establish shared OPLs in public space near designated buildings, promoting sustainable urban delivery. Alternative SRMs are formulated using novel optimisation techniques, and equilibrium points are identified and analytically evaluated to determine optimal service fees and contract duration. Using real-life data from Melbourne, this study compares performance of these models under different scenarios. Partnerships involving shared public OPLs supported by local governments are the most cost-effective and widely accepted solution, underscoring the critical role of government involvement in facilitating these partnerships.
Language: English
Subfield: Building and Construction
Field: Engineering
Domain: Physical Sciences
Open Access status: hybrid
Estimated APC paid: $4,420
OpenAlex ID: W4417293904