Fast or Slow? Logistics Way Choices for Perishable Products Under Competition

This study investigates a logistics way game where two competing shippers of perishable products may choose between fast and slow logistics ways. The fast logistics way allows a shipper to retain better delivered product quality, whereas the slow one provides a cost advantage. The two shippers sell high- and low-quality products separately. We highlight how the equilibria of the logistics game are determined by the initial qualities of the two products and the differences in the transportation times and unit logistics costs of the two logistics ways. We find that a large difference in transportation times enables the high-quality shipper to select the fast logistics way but the low-quality shipper to choose the slow one. The high-quality shipper can benefit from the large difference in delivered product qualities, whereas the low-quality shipper avoids direct competition. By contrast, when the unit logistics cost of the fast logistics way is relatively high, a small difference in transportation times stimulates the high-quality shipper to use the slow logistics way and the low-quality shipper to adopt the fast one. The high-quality shipper may seek the benefit from an increase in demand, whereas the low-quality shipper should narrow the difference in delivered product qualities. Finally, we find that faster logistics or higher initial product quality is beneficial to the high-quality shipper, whereas slower logistics or lower initial product quality may be optimal for the low-quality shipper. The findings offer useful insights for managers to choose their logistics ways