Gain Sharing in Horizontal Logistic Co-operation: A Case Study in the Fresh Fruit and Vegetables Sector

More and more companies start to notice the potential of setting up a logistic co-operation. They realize however that this idea is also a source of new challenges and impediments. We will focus on the challenge of dividing the total coalition gain among all partners. In this chapter, we show that significant differences exist between allocation methods and we examine the impact of defining gain defining gain sharing on a short term (daily) or a long term (monthly) basis. Too often, the selection of an appropriate allocation mechanism is considered as an independent decision with fairness as the single criterion. The companies involved, however, should realize what the impact of a certain allocation method might be, when applied in the broader context of horizontal co-operation. A selection of well known allocation methods and concepts is introduced and applied to a real life case study of fresh produce traders, jointly organising their transportation from the auction to a joint transport platform.