A Value-at-Risk (VAR) approach to routing rail hazmat shipments |
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| Institution: | 1. Department of Civil Engineering, University of Nebraska-Lincoln, 330P Whittier Research Center, Lincoln, NE 68588-0489, United States 68583-0851;2. Department of Civil Engineering, University of Nebraska-Lincoln, 330E Whittier Research Center, Lincoln, NE 68588-0489, United States 68583-0851;3. Department of Economics, University of Nebraska-Lincoln, 347 College of Business Administration, Lincoln, NE 68588-0489, United States;1. College of Management and Economics, Tianjin University, Tianjin 300072, China;2. Faculty of Business Administration, Memorial University of Newfoundland, St. John’s, Newfoundland and Labrador A1B 3X9, Canada;3. DeGroote School of Business, McMaster University, Hamilton, Ontario L8S 4L8, Canada |
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| Abstract: | Hazardous materials (hazmat) accidents are rare though the consequences could be disastrous. Given the possibility of low probability – high consequence event, a risk-averse routing hazmat shipment is necessary. We propose a value-at-risk (VaR) approach to route rail hazmat shipments, using the best train configuration, over a given railroad network with limited number of train services such that the transport risk as measured by VaR is minimized. Freight train derailment reports of the Federal Railroad Administration were analyzed to develop expressions that would incorporate characteristics of railroad accidents, and then to estimate the different inputs. The proposed methodology was used to study several problem instances generated using the realistic network of a railroad operator, and to demonstrate that it is possible to develop different routes for shipments depending on the risk preference of the decision maker. |
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| Keywords: | Hazardous materials Risk assessment Railroad transportation Value-at-risk |
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