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.     

The asymmetric effects of income and fuel price on air transport demand

Forecasts of passenger demand are an important parameter for aviation planners. Air transport demand models typically assume a perfectly reversible impact of the demand drivers. However, there are reasons to believe that the impacts of some of the demand drivers such as fuel price or income on air transport demand may not be perfectly reversible. Two types of imperfect reversibility, namely asymmetry and hysteresis, are possible. Asymmetry refers to the differences in the demand impacts of a rising price or income from that of a falling price or income. Hysteresis refers to the dependence of the impacts of changing price or income on previous history, especially on previous maximum price or income. We use US time series data and decompose each of fuel price and income into three component series to develop an econometric model for air transport demand that is capable of capturing the potential imperfectly reversible relationships and test for the presence or absence of reversibility. We find statistical evidence of asymmetry and hysteresis – for both, prices and income – in air transport demand. Implications for policy and practice are then discussed.     

Impacts of trade related sustainability strategies on freight transportation: Modelling framework and application for France

The circular and functional economies are being presented in the literature as potential strategies for future sustainable societies. In terms of the consequences for supply chains, they will promote a much more dispersed and diversified, local and network based usage of goods than the current economy, which is comparatively linear, concentrated, long distance oriented and scale economy based. A gap in the literature is the assessment of the effects of these systems on freight transport flows. In our paper, we present a first attempt at estimating this impact using freight transport scenario building and quantitative modelling. In order to translate the main parameters that characterize these systems into factors determining freight transportation volumes, we develop a framework based on a typology of goods categories describing functional and spatial proximity between producers and consumers. In order to simulate changes in the economy, we develop scenarios for the shifting of goods from one category to another and, additionally, include internalization policies that should guide their realization. We calculate the impacts on freight flows using a new interregional transport model for France that includes distribution chains and produces estimates of external costs of transport. Our results show that circular and functional economies could lead to a 2–5% reduction of air pollutant emissions and up to a 14–26% reduction if combined with the internalization of external costs. The scenario with ongoing mass production for differentiated demand is found to lead to a 5% increase of environmental impacts compared to the baseline.     

The causal relationship between GDP and domestic air passenger traffic in Brazil

Abstract

This paper examines the causal relationship between economic growth and domestic air passenger transport in Brazil, using Granger's causality test. Total domestic passenger-kilometres are used as a proxy for air transport demand and gross domestic product as a proxy for economic growth. The test spans the period from 1966 to 2006. The results lead to the acceptance of the hypothesis that there is a unidirectional Granger causal relationship from economic growth to domestic air transport demand in Brazil, having a high elasticity in the short term.     

Impacts of information technology and urbanization on less-than-truckload freight flows in China: An analysis considering spatial effects

Understanding the relationship between socioeconomic factors and the Less-than-Truckload (LTL) freight flows is important for transportation planners and policy makers. This paper explores the impacts of information technology, urbanization on LTL freight flows by using a spatial autocorrelation model with freight flow data from a leading LTL company in China. The results show that all IT variables and urbanization variables have positive effects on freight flows. Distance, as expected, is negatively correlated with the freight flow volume. The application of the spatial autocorrelation model further shows that origin dependence, destination dependence and OD dependence are all significant, justifying the consideration of spatial interdependence. Finally, policy implications are discussed based on the estimated results. These findings shed light on the impacts of internet and urbanization on freight transportation, and contribute to the design of freight policies and the development of the LTL industry.     

The long-run behaviour of transport performance in India: a cointegration approach

The long-run relationships between variables representing transport performance and other macro-economic variables in India are analysed in this paper using the concepts of cointegration and error correction. The results show that passenger-kilometres (PKM) in India are likely to increase faster than gross domestic product (GDP), and much faster than urbanisation. The tonne-kilometres (TKM) are highly correlated to industrial growth, and are likely to increase faster than the index of industrial production. Both the passenger and freight performances are relatively inelastic to price changes. The error correction model (ECM) shows that both passenger and tonne-kilometres adjust to their respective long-run equilibrium at a moderate rate, with about 35% of adjustment in PKM and 40% of adjustment in TKMs occurring in the first year.     

Carbon dioxide emissions from port container distribution: Spatial characteristics and driving factors

Port carbon dioxide (CO₂) emissions in China have become an ever-increasing public concern due to their significant impacts on human health and the environment. However, existing studies focus mainly on CO₂ emissions from vessels calling at the ports and cargo handling within the ports, paying little attention to the inland distribution networks. To fill this gap, this paper proposes an easily implemented method for calculating CO₂ emissions from port container distribution (PCD) and investigates their spatial characteristics and driving factors. By analyzing 30 container ports in China, the main findings are as follows. First, road transportation is the major contributor of CO₂ emissions from PCD due to the lack of rail and inland water transportation. Second, PCD carbon emissions exhibit significant local spatial clustering. That is, ports with similar geographical locations tend to present a similar pattern of PCD carbon emissions. Third, as suggested by the spatial Durbin model, PCD carbon emissions are negatively determined by local gross domestic product, number of port berths, but are positively determined by local tertiary industry value and highway freight volume, and waterway freight volume in both local and neighboring ports. These results provide empirical insights into cross-port collaboration in reducing PCD carbon emissions.     

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.     

An analysis of rail freight operational efficiency and mode share in the British port-hinterland container market

The growth in container shipping poses considerable challenges to efforts to reduce the negative externalities associated with freight transport. There are particular concerns about the impacts of the associated port-hinterland freight flows. Through empirical research, this paper examines trends in the operational efficiency of the British port-hinterland container rail freight market and to assess the impacts of any changes on the overall sustainability of this market. Original survey work conducted in 2007 and 2015 has allowed longitudinal and cross-sectional analysis of the characteristics of this market.The survey findings reveal that rail’s mode share of port container throughput (in TEU) has increased from 14.7% in 2007 to 16.6% in 2015 and it is likely that its share of the associated hinterland activity has also risen. Rail was carrying 25% more TEU by 2015 without an increase in train service provision. Increases in mean train capacity and mean load factor were observed, leading to growth in the mean train load from 44 TEU in 2007 to 55 TEU in 2015. This considerable improvement in operational efficiency is expected to have reduced the negative externalities per unit of transport activity associated with the rail-borne hinterland container flows, though scope is identified for further improvements in sustainability.     

A cost and CO2 comparison of using trains and higher capacity trucks when UK FMCG companies collaborate

Companies working in a collaboration are able to achieve higher vehicle capacity utilisation and reduced empty running, resulting in lower costs and improved sustainability through reduced emissions and congestion. Collaboration produces higher volumes of goods to be moved than individual companies which means that further efficiencies may be possible by relaxing the freight mode constraints and considering rail and higher capacity vehicles. This paper explains how real world data has been used in a model to quantify the economic and environmental benefits in the FMCG sector delivered through collaboration utilising road and rail freight modes. Data for one month was provided by 10 FMCG companies and included freight transport flows between depots and customers, inter depot movements, and supplier collections. Detailed road and rail costs and operating characteristics were obtained and, with the transport flows, applied to a network design model which was used to validate the company data sets. A strategy examining the potential use of alternative higher capacity vehicles and rail for the flows between nine regional consolidation centres showed cost and CO₂ savings. Just under half the inter-regional flows benefited from double deck trailers, longer heavier vehicles for 30% of the flows and rail with different wagon configurations for the rest. In summary there was a 23% reduction in cost with 58% fewer road kilometres and a 46% reduction in CO₂ emissions. The ability to backhaul the same mode of transport between most of the regional centres was one of the strengths of this strategy.     

Transport bottlenecks and Tanzania's economic problems

Abstract

The paper discusses Tanzania's transport problems in the context of the prevailing acute economic crisis. It looks at the development of the transport system, especially the rail and road network, from the German days to the new Chinese‐built Tanzania‐Zambia Railway. The East‐West orientation of the major parallel rail lines and roads reflects the dependency of the economy on export‐import trade. A major challenge to the transport system is the haulage of agricultural products, mainly for export but also for the internal market, not to mention the haulage of imported commodities.

The provision and utilization of transport services is discussed in the context of the historical, and institutional setting of the road haulage industry, particularly its public and private sector configurations. Due to scarcity of foreign exchange, both sectors, especially the private, are starved of vehicles and spare parts.

The operation of ocean and lake shipping services and Air Tanzania are discussed. It is recommended that the latter should concentrate on essential domestic services plus some limited regional services. External financing of transport projects and its implications are also considered.

It is concluded that despite the break‐up of the East African transport system, the Tanzanian transport system, although shaky, has avoided major breakdowns and in some cases, especially in trade, has provided the foundation for at least medium‐term improvements. More attention is recommended to organizational problems of track use by freight and passenger carriers and to making the best use of existing facilities.     

Modelling the full costs of an intermodal and road freight transport network

This paper develops a model for calculating comparable combined internal and external costs of intermodal and road freight transport networks. Internal costs consist of the operational-private costs borne by the transport and intermodal terminal operators, and the time costs of goods tied in transit. The external costs include the costs of the impacts of both networks on society and the environment such as local and global air pollution, congestion, noise pollution, and traffic accidents. The model is applied to the simplified configurations of both networks using the inputs from the European freight transport system. The objective is to investigate some effects of European Union policy, which aims to internalise the external costs of transport, on the prospective competition between two networks from a social perspective.     

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.     

The impact of terminal handling charges on overall shipping charges: an empirical study

Before the introduction of terminal handling charges (THCs), traditional freight rates included both ocean freight charges and terminal charges at ports. Since the introduction of THCs in 1991, the freight rate has become a “port-to-port” charge that covers only the sea leg, while the on-shore costs of using the container terminals are charged separately as THCs. Although both THCs and freight rates are collectively set by conferences, in this study we argue that the former are easier to enforce because they are invariant to other attributes such as haulage distance, inland transport services and types of commodity being shipped. This argument is consistent with the empirical findings from this study that suggest the separation of ocean freight rates from terminal charges has increased the overall shipping charges. In addition, we find that THCs affect the Hong Kong container handling industry by lowering its throughput.     

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.     

Forecasting Freight Flows

Trade patterns and transport markets are changing as a result of the growth and globalization of international trade, and forecasting future freight flow has to rely on trade forecasts. Forecasting freight flows is critical for matching infrastructure supply to demand and for assessing investment. This article models long-term dynamic physical trade flows and estimates a dynamic panel data model for foreign trade for the EU15 and two countries from the EFTA (European Free Trade Association) 1967–2002. The analysis suggests that a dynamic three-way-effects gravity equation is the best-fitted econometric model. The analysis uses a structural relationship to explain the structure of the exchange of the goods—a relationship that can be used in the year of forecast. This article also provides a new methodology for converting monetary aggregates into quantity aggregates. The resulting commodity growth rates constitute a valuable input to freight models for forecasting future capacity problems.     

The integration of Taiwanese and Chinese air networks for direct air cargo services

The two sides of the Taiwan Strait perform mutually dependent but complementary activities in the global manufacturing supply-chain. As a result, trade between Taiwan and China grew in double digits annually in the 1990s. With growing economic ties, direct air links are inevitable. In this research, we analyzed government documents and interviewed the air cargo carriers and airlines that currently serve the Taiwan–China air cargo market. This information enabled us to tabulate the trade, estimate the airport-to-airport air cargo demand and calibrate the international and domestic freight tariffs. We used a connectivity measurement and classified Chinese airports into national, regional and local classes in a hub-and-spoke air cargo network. We developed a mathematical model and a branch-and-bound algorithm. The results showed that at least two transit airports are economically necessary for a Taiwan–China air link. Shanghai and Xiamen were always the top two transit airports. The third airport would be Changsha if the decision becomes three air-links. These links are different from the top three passenger transit airports, Fuzhou, Xiamen and Shanghai, even though the cost saving is moderate.     

External costs of the Belgian interurban freight traffic: a network analysis of their internalisation

The strong expansion of freight road transports throughout Europe is an important source of congestion and pollution, as well as a cause of many accidents. To solve this problem will require the conjunction of many different remedies. One element of solution would be the promotion and substitution of transportation modes with less negative effects. This paper is focused on this solution. It presents some results obtained from a detailed GIS modelling of the Belgian multimodal freight transport network inserted within the overall trans-European network. It outlines the results of a simulation of the flows over the Belgian network in 1995 which allows to estimate some of the costs of several external effects of freight transports: the costs of pollution, congestion, accidents, noise and road damages. This paper provides also the simulated impacts on modal choice of a marginal external cost internalisation, and an estimation of the corresponding external cost savings.     

The European freight railway system as a hub-and-spoke network

This paper addresses a hub-and-spoke network problem for railroad freight, where a central planner is to find transport routes, frequency of service, length of trains to be used, and transportation volume. Hub-and-spoke networks, often found in air freight, have not been favoured by railways in the past. Such a structure could be profitable, however, if there exist concentrated freight flows on some service links. We formulate a linear integer programming model whose objective function includes not only the typical operational cost, but also cost due to the transit time spent by freight in the network. We then develop heuristic algorithms to solve large scale instances occurring in rail freight systems in France plus Italy; Germany; and a 10-country European network. By assuming that every node is equipped with consolidation capability, we let the final solution naturally reveal potential hub locations, the impact of several of which is studied by sensitivity analysis.     

多式联运条件下标准化道路货运装备的若干思考

目前我国正在大力推进多式联运,然而长期以来,我国货运装备的标准化水平较低,且与国际相比仍缺少相应的国家标准,因此,以道路运输装备为主体的装备很难实现与其他运输装备的兼容。本文综合分析了国内外多式联运工具及相关法规的基础上,提出了多式联运装备应具有的特点。