The 3P concept brings transparent competitive bidding to each step of the delivery process. Any 3P Service Provider can add capacity to the system as long as their equipment meets the 3P standards. If a Service Provider can make more efficient, safer, cheaper or faster assets they will be able to outcompete the others and grow. This not only keeps prices low but also rewards innovation and will ensure the service becomes more efficient and effective over time.
To make this bidding system work there needs to be a unit of measure at the service level which enables Service Providers to be paid accordingly. At present this payment units are the Step and the Switch.
Step = Distance x Weigh
Distance Unit = 100 Meters D is always as the crow flies. A ground based provider may take a longer different route but only the start and end points are used. The lowest D value will be 1 for any Step even where the distance is less than 100m.
Weight Unit = 1kg W is the total gross weight of the Smart Case and can be found on the 3PDN.
Modifiers are based on the 3PDN and are used by the Service Providers to calculate if they are able to handle the case and how low they willing to bid to fulfill the Step.
Smart Case Size (C) - The different Standard Smart Case sizes would each have a different modifier, each modifier is set by the PPSP depending on what size case their Pigeons can handle. This modifier is added to W.
Elevation (E) - A modifier is added to D to account for any elevation gain from start to finish point. The lowest E could be set will be 1.0 as losing elevation does not pay back energy to aerial systems.
Priority Code (P) - Modifier from 1.0 to 10.0 is used to set priority over other packages.
Security Code (S) - Package security modifier would go from 1.0 up to an unlimited number depending on the surety of delivery the customer wants to pay for.
With these the modifiers the unit formula would look like this:
1 Step = (W x C) (D x E) x P x S = (WC)(DE)PS
A Package Router puts out a call to take a 2.5kg Standard Smart Case to another Router which is 2355m away. The Case is set at Priority 3 and Security 5.
All the 3PSPs in the area can calculate their cost to fulfill the step with their modifiers plugged into the equation. Service Provider A (a bus based system) can deliver that step for £0.282 but it would reach the destination in an estimated 19 min. Service Provider B (fully aerial) can deliver for £1.358 but it will only take 4 min.
The Smart Coop can look at the Target Delivery Time on the 3PDN and calculates which Service Provider to choose. In this case the target delivery time over two hours away and as congestion is light so A would be chosen over B.
Package Routers will also need to be paid to receive, hold and send packages on securely.
The Router's minimum Hold Price, simply based on the Smart Case Size and Security Code, is included with the Routers location on all the stored Package Routing Tables on a network.
When a Router is online it can constantly update it's Hold Price depending on traffic flow. If it is nearly full the Hold Price would go higher, if it is empty it would lower the price to get more business. This Flexible Hold Pricing would automatically cause packages to be routed around more congested areas and balance loads across a network.
While in offline mode a Sending Package Router could still find the next best Router based on either price or location.
As Mules are moving Package Routers fixed to the top of buses, trucks, self driving cars, etc. they charge both the Step bid price and a minimum Hold Price. Mules can also be paired with a Pigeon which travels with the Mule to provide more efficient Package Switching and Final Steps/Deliveries.
So Who Is Competing? The Package or the Service Providers?
This depends on whether the network is congested or not. In a network with spare capacity the Physical Assets lower their offers until even lowest priority Packages will pay them. When congestion is high the market will cause the Packages to increase their bids.
Multi Step and Hold Bidding
Using the Virtual Forwarding Log a Service Provider can bid to fulfil not just one but a series of contiguous steps in a Package's journey to it's destination.