Central coordination

An obvious solution for the barge handling problem is to establish a central trusted party that coordinates the activities of terminals and barges. However, this solution is not acceptable for companies involved. The reasons are i) companies want to stay autonomous, i.e., in control of their own operations, and ii) they are reluctant to share (operational) information that could possibly undermine their competitive position. So, even if central coordination could offer an efficient solution from a logistical point of view, it will never be effective since companies will simply not accept it.

Central coordination is also hard to achieve for another reason. It requires that the central trusted party weighs the interests of players, which are often conflicting. It also requires a form of gain and loss sharing, since the central party sometimes makes decisions in favour of one player at the cost of another player. One can imagine that this could lead to a lot of discussion between players and make the system instable. Finally, central coordination is also difficult from an optimization point of view, since information changes over time which makes it hard to define an ‘optimal’ solution or to calculate the optimum in real-time. Next>>