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.     

Generation of logistics networks in freight transportation models

This article analyzes the concept of logistics networks in the context of behavioral freight transport modeling. Starting from the basic definition of networks, the different perceptions of networks in transportation science and logistics are worked out. The micro?Cmacro gap, as a main challenge in freight transport modeling, is explained by the existence of logistics networks on a meso level. A taxonomy of modeling methods dealing with logistics networks is defined, based on two characteristics: the changeability of networks within models (fixed, partially variable and variable networks) and the form of cost functions mapped (economies of scale, constant average cost, and diseconomies of scale). For each category, different possible modeling methods and their application in existing freight transport models are discussed. A special focus is placed on methodologies and models that map variable networks.     

Framing the Nexus of Globalisation,Logistics and Manufacturing in Europe

Abstract

Under the ongoing influence of globalisation, supply chains have changed significantly. New logistics and manufacturing systems have emerged, causing longer transport distances and increasing transport emissions. The existing research into the sustainability impacts of freight transport has largely viewed it as being a macro-level economic and political phenomenon and has ignored the interdependencies amongst micro-level economic actors, including firms and businesses in the private sector. In this paper, we presume that the lack of conceptualisation of freight transport in relation to wider institutional contexts and firm behaviour results in the lack of a holistic approach to understanding freight governance in the face of globalisation. We argue for the use of institutional economic geography lenses to elucidate the distribution networks of emerging logistics and manufacturing practices and its implications for freight transport. We illustrate our argument through a broad look at the European logistics and manufacturing practices and global production.     

State-of-the art of freight forecast modeling: lessons learned and the road ahead

In this paper we review freight forecasting models and current advances and needs with respect to data and model development. We then present a case study to suggest which models should be developed for the State of California in the US. We suggest several alternatives including an aggregate commodity flow model, a disaggregate regional logistics model and a hybrid regional logistics model with a truck touring model. We point out however, that the data requirements for the latter model would be extensive. In addition, the development of hybrid models, for example progress in the integration of regional logistics models with urban truck touring models, will introduce new problems such as reconciling the outputs of multiple models for consistency.     

Shipping Lines and Logistics

Abstract

It has been acknowledged that logistics is a driving force that shapes the integration of the transport chain. This paper argues that while the liner shipping industry exhibits increased horizontal integration, its vertical integration remains limited. A clear distinction is drawn between freight logistics, container logistics and vessel logistics. Freight logistics is defined as part of the supply chain process, the focus of which is the goods being transported. The purpose of container logistics is to optimize the movements of the containers themselves, an operation that is directly related to vessel logistics which is concerned with maximizing vessel utilization. The paper demonstrates that shipping lines have to find the correct balance between these three types of logistics. Their interest in vertical integration is primarily because the management of container logistics provides direct support to vessel logistics. Their involvement in freight logistics remains unclear and uncertain.     

Multiple criteria and fuzzy based evaluation of logistics performance for intermodal transportation

This paper presents a framework to evaluate the logistics performance of intermodal freight transportation. Fuzzy set techniques are applied to assess the logistics performance within the decision process of freight operators. Using a fuzzy‐based approach, fuzzy‐AHP is applied to assess the criteria by different judgment procedures. Consequently, fuzzy‐MCDM is used to assess operators' perception of the logistics performance via proper assignment of numerical scores. The subjective judgments for hierarchical criteria are transformed into fuzzy degrees of score. The methodology provides an alternative approach to facilitate the importance of a set of performance criteria. It can also entail use of improved corresponding parameters to develop a better freight transport system.     

Determinants of modal choice in freight transport

In the next few years, exciting developments in the field of freight transport are likely to occur. The Channel Tunnel will be perceived as giving railways much greater distance of operation, compared to the current train ferry to/from Great Britain. The further development of swap-body technology will allow easier modal transfer and the creation, in 1992, of a single market in Europe will transform the pattern of trade. All of these are likely to have significant impacts on modal choice, and hence modal split, in freight transport. Reappraisal by many firms of the modes of transport used is likely but will it result in a net transfer of freight from road to rail and, if so, to what extent? To answer such questions, an accurate and reliable method of predicting modal split is required. Research in the past has concentrated on the development of modal split models based on generalised costs. These fail to explain adequately the prevalence of road freight in the UK. From surveys of freight managers within industry, it is clear that models to date rely too heavily on the economic cost factor and too little on behavioural factors (Jeffs 1985). This paper derives from a recent study of freight transport modal choice from the standpoint of the transport decision-maker within the firm. It attempts to shed light on the actual parameters which should be incorporated into a modal split model. Many variables appear to exert an influence on modal choice decision-making process. However, it is possible to categorise them into six main groups, namely: customer-requirements; product-characteristics; company structure/organisation; government interventions; available transport facilities; and perceptions of the decision-maker him/herself. It is the interactions and inter-relationships between these which ultimately determine freight modal split. This study has shown that the relationship between the outcome of the transport decision process and the values of particular determinants of modal split is not straight-forward, due to the complexity and variety of interactions involved. Perhaps one of the main reasons for researchers' failure hitherto to develop a successful modal-split model has been the preoccupation with techniques that rely on the development of common metric (e.g. generalised cost), which has led to the exclusion of some important explanatory variables along quite different dimensions. Another important issue concerns the appropriate level of aggregation. In order not to reduce the explanatory power of the key variables, it is important to work at a disaggregate level, although this does make substantial demands on data. The use of factor analysis enables both the aggregation of information without loss of behavioural reality and the specification of variables in terms of a common metric. In conclusion, freight transport has usually been examined within too narrow a framework. It must be placed firmly within the context of the total industrial process. The demand for freight transport is directly influenced by the level, composition and geographical distribution of production and consumption activities. Freight flows are complex and so it is highly unlikely that a universal mode-choice model can ever be developed. Future research should, therefore, be directed towards developing partial models in response to specific needs of those involved in decision-taking in the freight sector.     

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 private and social cost efficiency of port hinterland container distribution through a regional logistics system

Increasingly, the debate on freight transport and logistics involves the challenge of sustainable development. Key objectives of sustainable or “green” freight logistics systems are the mitigation of negative environmental and human health effects of distribution operations and the realization of a major modal shift in transport preferences, while at the same time achieving internal generalized cost efficiency and quality of services. Pursuing these goals requires the introduction of a range of measures. These measures call for private and public actors to take up various initiatives and adopt policies. Usually, it is more effective to combine different actions into an integrated package of measures than to introduce single instruments in isolation.This article explores the nexus between sustainability and port hinterland container logistics. In particular, the methodology and results of an empirical analysis based on applications of a network programming tool called the “interport model” are presented and discussed. The model enables an examination of all possible effects on inland container flows and their associated internal and external costs due to public and private initiatives in the field of port hinterland container logistics. The empirical analysis aims to evaluate the impact of a set of simultaneous policy options and operational measures on the competitiveness and sustainability of hinterland multimodal distribution of import and export containers handled at the seaports of the Campania region located in Southern Italy. The loading units can transit through the dry port facilities (the so called “interports”) located in the same region and/or through extra regional railway terminals, before reaching their ultimate inland destinations or the seaports. The integrated package of measures simulated by means of the model includes: (i) infrastructure policy, (ii) improvements of rail services, (iii) regulatory changes in terms of customs authorizations and procedures, (iv) removal of technical and legal barriers to fair and non-discriminatory competition in the market of rail traction between regional seaports and interports, (v) new business models integrating container logistics operations between seaports and interports, and (vi) social marginal cost charging of transport operations. Once this package of instruments is introduced, higher private and social cost efficiency of port hinterland container distribution through the investigated regional logistics system can be achieved. For instance, it has been estimated an annual saving of the order of about 12,660 tonnes of CO₂ equivalent emissions from transport corresponding to an external cost reduction of 0.27 million euros from the observed real life situation, whereas the estimated saving in terms of air pollution (CO, NO_x, PM, SO₂, VOC) from transport is approximately 220 tonnes per year corresponding to an external benefit of 1.31 million euros.The most immediate priority appears to be the customs and intermodal logistics integration of seaports and interports by means of full implementation of the “extended gateway” concept as a way to increase the rail share of modal split and improve the overall cost efficiency of the system. In addition, the simultaneous introduction of a social marginal cost charging policy can contribute to make the regional interports a viable solution to expand the hinterland reach of the regional seaport cluster.     

Intermodal transport in freight distribution: a literature review

There has been significant growth in research on intermodal transport in freight distribution since the 1990s. Differentiating itself from previously published literature reviews, this paper evaluates the current state of this research using Systematic Literature Review methodology. The complementary aims are: (a) to identify the research lines developed and to propose a criterion for classifying the literature, and (b) to discuss the empirical evidence that identifies existing interrelationships. The analysis has enabled three main lines of research to be identified. The first research line, basic principles of intermodal transport, groups together works related to the definition of intermodal transport and the results obtained using this transportation system. The second, improvements to the way that intermodal transport systems work, frames elements and variables that impact intermodal transport systems’ logistics efficiency, such as quality of service, information and communication systems, and freight planning and linkages among system operators to provide an adequate service. Finally, the third line, intermodal transport system modelling, identifies the main variables used to optimise these transport systems, the different focuses and approaches used in modelling, and the advantages and disadvantages of each focus. These research lines take in more specific sublines that incorporate articles that develop related research questions. Lastly, the discussion of the content of each of these research sublines enables us to identify gaps in the literature and comment on directions for future research.     

Decoupling of Road Freight Transport and Economic Growth Trends in the UK: An Exploratory Analysis

Abstract

Between 1997 and 2004, gross domestic product increased in real terms in the UK by one‐fifth, while the volume of road freight movement remained stable. This suggests that the long‐awaited decoupling of economic and freight transport growth has begun, possibly leading to a new era of sustainable logistics. This paper reviews previous research on the decoupling issue and recent trends in gross domestic product/freight tonne‐km elasticities in Europe and the USA. It then examines 12 possible causes of the observed decoupling in the UK using published statistics from a wide range of British and European sources. This analysis indicates that around two‐thirds of the decoupling is due to three factors whose impact can be quantified: the increased penetration of the British road haulage market by foreign operators, a decline in road transport’s share of the freight market, and real increases in road freight rates. Several other factors, most notably the relative growth of the service sector, the diminishing rate of centralization, and the off‐shoring of manufacturing, appear to be having a significant effect, though this finding cannot be measured on the basis of available statistics. The paper concludes that, while the decoupling is in the right direction from a public policy standpoint, the net environmental benefits are likely to be quite modest.     

国家物流枢纽体系下多式联运物流园区开发模式研究

近年来,国家积极部署推进运输结构调整,大力发展多式联运,统筹推进国家物流枢纽布局建设,多式联运物流园区正迎来前所未有的建设发展机遇。但我国多式联运尚处于发展初级阶段,多式联运物流园区尚未形成一整套完整的全链条开发模式。通过梳理该类园区的主要类型、投资建设主体及建设模式,结合当前国家物流枢纽建设要求,提出国家物流枢纽体系下多式联运物流园区的开发趋势,为社会主体参与园区开发提供方向指引。     

Profit-based maritime container assignment models for liner shipping networks

We propose the problem of profit-based container assignment (P-CA), in which the container shipment demand is dependent on the freight rate, similar to the “elastic demand” in the literature on urban transportation networks. The problem involves determining the optimal freight rates, the number of containers to transport and how to transport the containers in a liner shipping network to maximize the total profit. We first consider a tactical-level P-CA with known demand functions that are estimated based on historical data and formulate it as a nonlinear optimization model. The tactical-level P-CA can be used for evaluating and improving the container liner shipping network. We then address the operational-level P-CA with unknown demand functions, which aims to design a mechanism that adjusts the freight rates to maximize the profit. A theoretically convergent trial-and-error approach, and a practical trial-and-error approach, are developed. A numerical example is reported to illustrate the application of the models and approaches.     

Freight Transport Deceleration: Its Possible Contribution to the Decarbonisation of Logistics

The paper challenges the conventional view that the movement of goods through supply chains must continue to accelerate. The compression of freight transit times has been one of the most enduring logistics trends but may not be compatible with governmental climate change policies to cut greenhouse gas emissions by 60–80% by 2050. Opportunities for cutting CO₂ emissions by ‘despeeding' are explored within a freight decarbonisation framework and split into three categories: direct, indirect and consequential. Discussion of the direct carbon savings focuses on the trucking and deep-sea container sectors, where there is clear evidence that slower operation cuts cost, energy and emissions and can be accommodated within current supply chain requirements. Indirect emission reductions could accrue from more localised sourcing and a relaxation of just-in-time (JIT) replenishment. Acceleration of logistical activities other than transport could offset increases in freight transit times, allowing the overall carbon intensity of supply chains to reduce with minimal loss of performance. Consequential deceleration results from other decarbonisation initiatives such as freight modal split and a shift to lower carbon fuels. Having reviewed evidence drawn from a broad range of sources, the paper concludes that freight deceleration is a promising decarbonisation option, but raises a number of important issues that will require new empirical research.     

September 11 and the World Airline Financial Crisis

Abstract

This paper analyses the effectiveness of policy measures aimed at triggering a modal shift in the freight transport market. The analysis is based on the inventory‐theoretic framework that studies modal choice from a business logistics viewpoint. The crux of the inventory‐theoretic approach lies in the fact that explicit attention is paid to all costs in the supply chain that are affected by the choice of transport mode. After a brief literature review on the inventory‐theoretic framework, the framework is used to calculate the market shares of different freight transport modes for a hypothetical transport market. In a second step, the impact of some policy measures on the market shares of the transport modes is calculated. By way of illustration, the analysis is applied to the market for container transport from a seaport to its hinterland. It is shown that a combination of certain policy measures can lead to significant modal shifts from road transport to intermodal transport.     

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.     

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.     

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.     

Is a new applied transportation research field emerging?––A review of intermodal rail–truck freight transport literature

Intermodal freight transport has developed into a significant sector of the transport industry in its own right. This development has been followed by an increase in intermodal freight transportation research. We contend that a new transportation research application field is emerging; and that, while still in a pre-paradigmatic phase, it is now time to move on to a more mature independent research field. An independent research field can be justified because intermodal transport is a complex system that has characteristics which distinguishes it from other transport systems. We have reviewed 92 publications in order to identify the characteristics of the intermodal research community and scientific knowledge base. This paper will discuss aspects of this research, assessing the status quo and seeking directions for the future. To conclude, we will propose an intermodal research agenda which can direct the intermodal research field towards a period of “normal science”.