MIT1_201JF08_lec06

MIT1_201JF08_lec06 - Freight Demand Moshe Ben-Akiva 1.201 /...

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Unformatted text preview: Freight Demand Moshe Ben-Akiva 1.201 / 11.545 / ESD.210 Transportation Systems Analysis: Demand & Economics Fall 2008 Outline ● Background – Volumes – Types – Econometric Indicators ● Freight demand modeling – Framework – Logistics choices – Model system ● Trends and Summary ● Appendices: Extensions, Activity Systems, Model System 2 Major Types of Freight ● Bulk – Coal – Oil, Gas – Ores, Minerals, Sand and Gravel – Agricultural ● General Merchandise – Supermarket grocery ● Specialized Freight – Automobile – Chemicals ● Small Package 3 Bulk ● Commodity Characteristics – Cheap – Vast quantities – Transport cost is a major concern ● Relevant Modes – Rail unit train and multi-car shipments – Heavy truck – Barge and specialized ships – Pipeline 4 General Merchandise ● Commodity characteristics – Higher value – Greater diversity of commodities – Many more shippers and receivers – Logistics costs are as important as transport costs ● Relevant Modes – Rail general service freight car – Intermodal – Truckload – LTL (Less-than-Truckload) 5 Specialized Freight ● Commodity Characteristics – Large volumes, relatively few customers – Specialized requirements to reduce risk of loss and damage – High value (can afford special treatment) ● Relevant Modes – Specialized rail (multi-levels, tank cars, heavy duty flats) – Specialized trucks (auto carriers, tank trucks, moving vans) – Air freight 6 Small Package ● Commodity Characteristics – Very high value – Logistics costs are more important than transport costs – Deliveries to small businesses or consumers ● Relevant Modes – LTL – Small packages services – Express services – Air freight 7 Growth in US Domestic Freight Ton-Miles by Mode: 1996 - 2005 SOURCE: U.S. Department of Transportation, Research and Innovative Technology Administration, Bureau of Transportation Statistics. BTS Special Report: A Decade of Growth in Domestic Freight, Table 1 (July 2007). 8 Freight Demand ● Freight transport demand is a derived demand – Related to the volumes of goods produced and consumed – Location of suppliers and consumers is critical – Freight flows shift with • New sources of and uses for materials • New locations for manufacturers and retailers • New products and specialized transport 9 Freight Elasticities Model, elasticity type Elasticity estimates Rail Truck Aggregate mode split model a Price -0.25 to –0.35 -0.25 to –0.35 Transit time -0.3 to –0.7 -0.3 to –0.7 Aggregate model from translog cost function b,c Price -0.37 to –1.16 d -0.58 to -1.81 e Disaggregate mode choice model b,f Price -0.08 to –2.68 -0.04 to –2.97 Transit time -0.07 to –2.33 -0.15 to –0.69 a. Levin, Richard C. 1978. “Allocation in Surface Freight Transportation: Does Rate Regulation Matter?” Bell Journal of Economics 9 (Spring): 18-45 b. These estimates vary by commodity group; we report the largest and smallest. b....
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This note was uploaded on 12/04/2011 for the course ESD 1.210j taught by Professor Mosheben-akiva during the Fall '08 term at MIT.

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MIT1_201JF08_lec06 - Freight Demand Moshe Ben-Akiva 1.201 /...

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