Personalized Freight Route Recommendations With System Optimality Considerations: A Utility Learning Approach

—Traffic congestion has a negative economic and environmental impact. Traffic conditions become even worse in areas with high volume of trucks. In this paper, we propose a coordinated pricing-and-routing scheme for truck drivers to efficiently route trucks into the network and improve the overall traffic conditions. A basic characteristic of our approach is the fact that we provide personalized routing instructions based on drivers’ individual routing preferences. In contrast with previous works that provide personalized routing suggestions, our approach optimizes over a total system-wide cost through a combined pricing-and-routing scheme that satisfies the budget balance on average property and ensures that every truck driver has an incentive to participate in the proposed mechanism by guaranteeing that the expected total utility of a truck driver (including payments) in case he/she decides to participate in the mechanism, is greater than or equal to his/her expected utility in case he/she does not participate. Since estimating a utility function for each individual truck driver is computationally intensive, we first divide the truck drivers into disjoint clusters based on their responses to a small number of binary route choice questions and we subsequently propose to use a learning scheme based on the Maximum Likelihood Estimation (MLE) principle that allows us to learn the parameters of the utility function that describes each cluster. The estimated utilities are then used to calculate a pricing-and-routing scheme with the aforementioned characteristics. Simulation results in the Sioux Falls network demonstrate the efficiency of the proposed pricing- and-routing scheme.