Incorporating Logistics in Freight Transport Demand Models: State-of-the-Art and Research Opportunities

Freight transport demand is a demand derived from all the activities needed to move goods between locations of production to locations of consumption, including trade, logistics and transportation. A good representation of logistics in freight transport demand models allows us to predict the effects of changes in logistics systems on future transport flows. As such it provides better estimations of the costs of interaction and allows to predict changes in spatial patterns of freight transport flows more accurately. In recent years, the attention for freight modelling has been growing and new research work has appeared aimed at incorporating logistics in freight models. In this paper we review the state of the art in the representation of logistics considerations in freight transport demand models. Our focus is on the service and cost drivers of changes in logistics networks and how these affect freight transport. Our review proceeds along a conceptual framework for modelling that goes beyond the conventional 4-step modelling approach. We identify promising areas for freight modelling that have an integrative function within this framework, such as spatial computable general equilibrium models, supply chain choice models and hypernetwork models.     

On including travel time reliability of road traffic in appraisal

In many countries, decision-making on proposals for national or regional infrastructure projects in passenger and freight transport includes carrying out a cost–benefit analysis for these projects. Reductions in travel times are usually a key benefit. However, if a project also reduces the variability of travel time, travellers, freight operators and shippers will enjoy additional benefits, the ‘reliability benefits’. Until now, these benefits are usually not included in the cost–benefit analysis. To include reliability of travel or transport time in the cost–benefit analysis of infrastructure projects not only monetary values of reliability, but also reliability forecasting models are needed. As a result of an extensive feasibility study carried out for the German Federal Ministry of Transport, Building and Urban Development this paper aims to provide a literature overview and outcomes of an expert panel on how best to calculate and monetise reliability benefits, synthesised into recommendations for implementing travel time reliability into existing transport models in the short, medium, and long term. The paper focuses on road transport, which has also been the topic for most of the available literature on modelling and valuing transport time reliability.     

Transport infrastructure costs in low-carbon pathways

The rate and manner in which transport infrastructure (e.g. roads, railway tracks, airports) is deployed, will play an important role in determining energy demand, greenhouse gas emissions and the economic impact of the transport sector. This paper describes an exercise where the costs of infrastructure deployment for the transport sector have been incorporated into the IMACLIM-R Global E3 IAM. In addition to adding these costs, the modelling of the criteria for the deployment of infrastructure for roads has also been improved. It is found that this model recalibration results in a more accurate baseline as compared to historically observed data (2001–2013) for investments in energy demand, road infrastructure, and passenger kilometers travelled. Regarding macroeconomic effects, it is found that the imposition of a carbon emission trajectory to 2100 cause GDP to decrease relative to the newly calibrated baseline – this is a standard IAM result. However, when the deployment of infrastructure for roads and air travel is further constrained, the GDP loss is less than with a fixed carbon emission trajectory only. This is because early restriction of infrastructure for roads and air travel allows an expansion of public transport infrastructure which is adequate to meet low-carbon transport service demand whereas when less public transport infrastructure is available, more costly mitigation investments must be made in other parts of the economy. This suggests that restricting infrastructure deployment as a complementary policy to carbon pricing, lowers the cost of mitigation.     

A multivariate cointegrating vector auto regressive model of freight transport demand: evidence from Indian railways

In this paper long run structural relationship for freight transport demand is derived for railways in India using annual time series data for 1960–1995. Some of the recent developments in multivariate dynamic econometric time series modelling have been employed such as estimation of long-run structural cointegrating relationship, short-run dynamics and measurement of the effects of shocks and their persistence during the evolution of dynamic freight transport demand system. The models are estimated using a cointegrating vector autoregressive (VAR) modelling framework, which allows for endogeneity of regressors. Results indicate high GDP elasticity and low price elasticity, with real freight rate, i.e. the price variable behaving exogenously with respect to the system. Any disequilibrium in the short-run is likely to be corrected in the long run via adjustments in freight transport demand and GDP. Further, the demand system seems to be stable in the long run and converges to equilibrium in a period of around 3 years after a typical system-wide shock.     

Modelling mode choice for freight transport using advanced choice experiments

In this paper we use advanced choice modelling techniques to analyse demand for freight transport in a context of modal choice. To this end, a stated preference (SP) survey was conducted in order to estimate freight shipper preferences for the main attributes that define the service offered by the different transport modes. From a methodological point of view, we focus on two critical issues in the construction of efficient choice experiments. Firstly, in obtaining good quality prior information about the parameters; and secondly, in the improved quality of the experimental data by tailoring a specific efficient design for every respondent in the sample.With these data, different mixed logit models incorporating panel correlation effects and accounting for systematic and random taste heterogeneity are estimated. For the best model specification we obtain the willingness to pay for improving the level of service and the elasticity of the choice probabilities for the different attributes. Our model provide interesting results that can be used to analyse the potential diversion of traffic from road (the current option) to alternative modes, rail or maritime, as well as to help in the obtaining of the modal distribution of commercial traffic between Spain and the European Union, currently passing through the Pyrenees.     

Promoting Development through Multimodal Freight Transport in Bangladesh

Abstract

Development emanating from international trade and investment in many least‐developed economies is impeded by inland freight transport systems that restrict multimodal transport. Increasing international trade may raise gross domestic product, generating increased demand for internal containerized cargo movements, but the requisite transport infrastructure is lacking. The paper explores impediments to developing effective multimodal transport and possible solutions in Bangladesh, which is an extreme case in point. It reports applications of Delphi techniques that explored local expert opinions regarding policies required to tackle such impediments. A panel of corporate executives perceived a changing inland transport system poorly suited to efficient origin‐to‐destination cargo movements in international supply chains. To promote further development, customs procedures must be streamlined and Bangladeshi shippers must adopt a door‐to‐door transport system.     

Impacts of combining partial and general equilibrium modelling in freight transport analyses – a forest sector case study from Norway

Abstract

The forest sector in Norway is very transport intensive, accounting for approximately 14% of total domestic freight transport traffic on Norwegian roads. This paper presents an analysis linking a general equilibrium freight transport modelling tool with a partial equilibrium model of the forest sector. The freight transport model predicts transport costs, modal split and transport patterns, and the results are treated as inputs to the forest sector model. The objective of the paper is to analyse the modelling effect of taking forest sector model effects back into the freight transport model and treated as new demand. Compared to a base scenario for the year 2020, we compare analyses with and without this new demand from the forest sector model back into the freight transport modelling tool.     

The Myth of Travel Time Saving

Abstract

The idea that the main benefit of improvements to transport infrastructure is the saving of travel time has been central to transport economic analysis. There is, however, little empirical evidence to support this proposition. Indeed, in the long run average travel time is conserved, implying that travellers take the benefit of improvements in the form of additional access to more distant destinations made possible by higher speeds. Such a perspective, based on considerations of the value of access, has implications for economic appraisal, modelling and policy.     

铁路运输企业视角下的公、铁运输企业短期博弈分析

在"一带一路"战略背景下,铁路物流中心的公铁联运业务至关重要。公铁联运业务各主体的协同存在易变性,资源双方是否信任会影响各自的策略选择。本文以铁路运输企业为主导,铁路运输企业接到客户公铁联运订单时会借助平台发布公路运输需求信息,公路运输企业根据自身情况向铁路运输企业表达意愿,最后铁路运输企业根据其采取的策略找到自身是否接受合作的均衡条件。本文通过对公、铁运输企业的短期博弈分析,找到双方合作的均衡条件,为双方利益分配奠定基础。     

The potential demand for a urban freight consolidation centre

This paper reports the results of a stated-preference study aimed at investigating how transport decisions are made by receivers or by transport operators about the potential use of an urban freight consolidation centre in the city of Fano, Italy. Because there are no revealed preference data, a stated-choice methodology is used. The stated-choice experiments present two alternatives—one using a private vehicle subject to various traffic regulations and one using the urban freight consolidation centre with varying cost and efficiency levels. Conventional discrete choice data modelling shows that the potential demand is influenced mainly by the distance of the parking bay from the shop, by access permit cost, by the service cost of the urban freight consolidation centre, and by the delay in delivery time. Simulations are then performed to assess how the potential demand is affected by various incentives and regulations affecting urban goods distribution.

Efficiency of European Funds in the Accession Countries: The Case of Transport Infrastructure Investments in Latvia

ABSTRACT

A transport initiative, like any kind of public action, has an impact on the monetary cost, time cost, efficiency and comfort of the transportation of goods and people, in particular transport infrastructure investments. All such initiatives are subject to cost benefit analyses at the national and EU level to know whether the present value of total net benefits including environmental impacts exceeds their cost. However, several important policy issues remain unresolved in standard evaluation procedures. One issue is whether the so-called direct measurement of user benefit, which consists of quantifying changes in surplus of the users of the transport system, captures all welfare generated in the economy. Another issue is how the gains (or possibly losses) of a transport initiative are distributed among regions. The aim of this article is to perform a systematic and quantitative analysis of the socio-economic and spatial impacts of alternative transport investments by carrying out scenario simulations in order to improve the understanding of the impact of transportation policies on the short- and long-term spatial development in Latvia. The general result from the scenario simulations is that rail projects seem to be more effective in terms of promoting regional economic activity than road projects.     

Migration of railway freight transport from command economy to market economy: The case of China

In recent years, Chinese railway freight transport has been facing great challenges from transport market reformation and economic expansion. Although the total volume of railway freight has been increasing, its market share has decreased greatly, especially at the beginning of migration from command economy to market economy. This paper considers four aspects believed to be responsible for the loss of the railway freight market share. First, we review the history and current situation of the Chinese railway freight transport and study the relationship between economic development and freight transport in China. Second, the causes resulting in the loss of the market share of railway freight are analysed in detail. Third, the current measures taken by Chinese Railways (CR) to restore its competitiveness are discussed. The effects of these measures on railway traffic volume, market share and productivity are also studied. Finally, the way forward for the future of CR is discussed. It is concluded that CR has not yet adapted sufficiently to new economic conditions, although in recent years progress has been made. Further reform will be needed.     

European freight transport and the environment: empirical applications and scenarios

Environmental issues have received a prominent place in transport policies of most European countries. The coordination of such policies however, is fraught with many difficulties. The increasing freight flows after the European integration are a source of concern, but have not yet led to straightforward and effective environmental strategies.The paper focuses on the Trans Alpine freight transport systems in the light of the future integration of single national transport systems into the European transport network. The environmental, social and institutional peculiarities of this ‘region’ have favoured—in the past—the development of strong nationally-oriented policies, partly in contrast with the goals promoted by the European Union. The present analysis aims to highlight opportunities, and limits inherent, in the implementation of various infrastructure projects oriented towards a drastic change of the Alpine transport systems structure. The Alpine countries, viz. Austria and Switzerland, play a central role in the promotion of environmental benign modes of transport of goods, with a clear focus on rail. The route choice and modal split of freight flows in Europe are taking place simultaneously. In this paper the results of European freight flow models (based on logit analysis and neural networks) will be presented. An important exercise is then to assess the consequences of various types of eco-taxes on road transport in Europe. In this context, several policy scenarios will be dealt with.     

Recent developments in national and international freight transport models within Europe

The past decade has seen many new freight transport models for use in transport planning by public authorities. Some of these models have developed new concepts, such as logistics modules, inclusion of transshipments, storage and sourcing and the determination of shipment size. This paper provides a review of the European literature on freight transport models that operate at the national or international level and have been developed since 2004. The introduction of elements of logistics thinking is identified as a common theme in recently developed models, and further worked out. Furthermore, ideas on what might be the next key developments in freight transport modelling are presented.     

Transport in Tokyo

This paper gives a review of the historical and geographical preconditions as well as of the population and economic development which led to the unique and complex transport systems of Tokyo. Tokyo Metropolis, one of the most populous cities in the world, is located in the National Capital Region of Japan where 32 million people are living today. The special transport problems deriving from this high population density are described in context with the development of employment, transport infrastructure and motorization. Due consideration is given to the influence exerted by the structure of the whole region on the overall traffic behaviour.

Several transport phenomena and problem solutions which are typical of the traffic systems in Tokyo are described, such as the change of rush hour congestion rates depending on subway extension, modal split for different trip purposes in the inner urban area, or information via local radio broadcasts with very short range of transmission.

The main current transport issues are discussed. Though the transport networks in Tokyo are some of the most developed in the world, there is still heavy congestion in rush hours. The basic policy therefore is the further strengthening and improvement of the public transport network.     

Comparison of road freight transport trends in Europe. Coupling and decoupling factors from an Input–Output structural decomposition analysis

Decoupling road freight transport from economic growth has been acknowledged by the European Union as a key means to improving sustainability. It is therefore important to identify both the coupling and decoupling drivers of road freight transport demand in order to determine possible factors that may contribute to reduce road transport in the future without curbing economic development. This research proposes an Input–Output (IO) structural decomposition analysis (SDA) to explain road freight transport in terms of a set of key factors that have strongly influenced road freight demand in recent decades in European countries—such as economic growth, economic structure and the evolution of road transport intensity (including improvements in both supply and transport systems). This methodological approach allows us to quantify and compare their contribution in different European countries to either increase or decrease road freight transport demand. The empirical basis for this analysis is a dataset of nine European countries which have IO tables and road transport data available from 2000 to 2007, comprising data on domestic production, imports and exports as well as tonne-kms for 11 types of commodity classes. The results show that, as a whole, aggregate road transport demand has grown—driven mainly by economic activity—but this growth has been strongly curbed in some countries by changes in road freight transport intensity and moderately by the dematerialization of the economy. International transport has been also proven to be a key factor driving road freight transport volumes. Moreover, the increased penetration of foreign operators in national haulage markets appears to have reinforced the final decoupling levels observed in some cases.     

Environmental benefits from better freight transport management: freight traffic in a VAR model

Most macro empirical studies on the price elasticity in the freight transport sector focus on the demand for transport. However, most of the external costs from the freight transport sector are more closely linked with the traffic volumes. In the paper an explicit distinction between traffic and transport demand is made by regarding traffic as an input in the shippers’ production of transport services, while transport demand is derived from firms’ production of output. An empirical analysis based on aggregate time series is carried out in a VAR model, where the stationary long run relationships are estimated using the so-called ‘Johansen Procedure’. The estimated price elasticity with respect to traffic (−0.81) is considerably higher than the elasticity with respect to transport (−0.47).     

Allocating Revenue Risk in Transport Infrastructure Public Private Partnership Projects: How it Matters

Abstract

Transport infrastructure public private partnership (PPP) projects are very diverse and complex in nature not only because of their mode-specific intricacies but also because of their inherent economic characteristics that relate to the scope of involvement of the private sector in the project, the large sunk costs incurred, and ultimately, the competition to which these projects are exposed. The allocation of revenue risk is of paramount importance for the successful implementation of such projects and a sub-optimal allocation may lead to project structuring that is unnecessarily expensive and vulnerable to failure. At the same time, the revenue risk depends critically on the remuneration model used (user-based versus budget-based) and may, in turn, take the form of demand risk, counterparty risk or combinations of the two. This review explores the issues related to revenue risk allocation for transport infrastructure PPP projects. Overarching principles for the allocation of revenue risk that transcend mode-specificity are identified and compared to case studies generated in the context of the COST Action TU1001. The results show that theory and practice are divergent, leading to sub-optimal structuring and exposing projects to potential failure.     

Land Transport Policy and Public Transport in Singapore

Singapore has a sophisticated and efficient system of land transport to serve a growing demand for transportation. Constrained by limited space, a comprehensive set of land transport policies has been in place to balance the growth in transport demand and the effectiveness and efficiency of the land transport system. A multi-pronged approach has been used to achieve the objective of a world-class transportation system. These include integration of urban and transport planning, expansion of the road network and improvement of the transport infrastructure, harnessing the latest technology in network and traffic management, managing vehicle ownership and usage, and improvement and regulations of public transport (Ministry of Transport (MOT) (2003) Policy and Regulations, Land Transport, Available: www.mot.gov.sg, Date of Access: 15 September 2003). Singapore was the first country in the world to introduce various new techniques, notably the Area License Scheme (ALS) in 1975 and the Vehicle Quota System (VQS) in 1990. An Electronic Road Pricing (ERP) system replaced the ALS in 1998 to take the role of congestion management, the experience of which has also drawn particular attention from many large cities in the world. In 2003, the world’s first and only fully automatic heavy rail Mass Rapid Transit system was opened to the public, marking a new chapter in Singapore’s innovative approach to solving its land transport problem. This paper reviews the land transport policy implemented in Singapore and pays special emphasis to its public transportation systems.