Title: The California Cut Flower Industry: A Case for Transportation Consolidation
This talk evaluates the California cut flower industry’s current transportation practices and investigates the feasibility and cost of establishing a shipping consolidation center in Oxnard, California. The problem is formulated using a Mixed-Integer programming model. The model estimates a 34.8% shipping cost decrease, $20M, if all California farms participated in the consolidation center. Our analysis of estimated cut-flower trade flows originating from Miami shows that the magnitudes of these flows are relatively sensitive to shipping cost, controlling for market size. However, a major difficulty in establishing and sustaining cooperation is finding a fair way to share the costs of cooperation among the participants.
The second part of the talk will focus on the design of cost sharing mechanisms for freight consolidation in an agricultural supply chain.
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