On Designing an Intelligent Shipping Algorithm for Decentralized E-Commerce Systems

Abstract

The foundation of online shopping lies in the efficient and timely delivery of products from sellers to customers directly through a streamlined (and user-friendly) digital platform. However, transitioning to the online shopping platform leads to the following two problems: higher shipping charges and product handling fees levied by these platforms. The shipping charge is typically exempted if the order value is equal to or higher than the predetermined threshold value. The existing shipping charge exemption rule does not favor customers with low and mid-range budgets who often place orders valued lower than the threshold. To address the inherent biasness, we propose the History Informed Shipping (HIShip) method, establishing a fair business environment for all parties involved – the online shopping platform provider, sellers, and customers. HIShip intelligently utilizes the order history data, i.e., the cumulative sum of orders’ value placed in the recent past, to make the shipping charge exemption rule friendly to low and mid-budget customers. Furthermore, it reduces biasness against vendors selling products that cost less than the threshold amount. Such a win-win scenario for the seller and customer eventually generates more revenue for the online shopping platform. We simulate the blockchain environment and use the TPC-H dataset to assess the performance. Our algorithm outperforms the threshold-based traditional approach. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2024.