The approach utilises a simultaneous equations system to derive a discrete/continuous choice model for the choices of mode and shipment size in the intercity freight market. The method is applied to the demand for intercity freight transport using data from the US Census of transportation.
Topic: 2.4 General
Distribution has largely passed from control by the supplier to control by the retailer, and from own-account to contract operation. Improvements in the road network should make journey times more predictable. The “business potential” gained from the road improvements is often much larger than the time saved.
Since rail rates in the US were partially deregulated, they have been affected more strongly by competition and less by costs. The strength of competition from trucks depends on fuel prices and improvements in technology, and, on the demand side, on the availability of rail cars.
Some Implications of Sunk, Congestion and Seasonal Opening Costs within a Regional Grain Handling and transport System
A study of the Eyre Peninsula in South Australia shows that, if the grain handling system were being constructed from scratch, it would be cost effective to concentrate it at fewer sites. But when account is taken of sunk costs, congestion costs and opening costs, much less rationalisation is justified.
Cost calculations lead to an analysis of the limits of distance and other factors which determine whether it is rational to send goods by road, by rail, or by a combination of road and rail.
Deregulation and Rail-truck Competition. Evidence from a translog transport Demand Model for Assembled Automobiles
Deregulation of motor carriers could lead to cheaper and faster services, giving them a competitive advantage over rail. But this could be offset by deregulation of rail, followed by similar improvements in rail service. The model cannot be extended to other commodities other than automobiles.
Comparison with Canadian experience suggests that it might be desirable to allow US railroads to own trucking firms, as this would lead to more use of intermodal piggybacking for freight.
This study reveals significant competition in varying degrees between rail, road and waterway freight transport, and finds that shippers take time to respond to changes in freight rates.
In both France and Switzerland recent studies have urged freer competition and a minimum of state intervention in freight transport. The author doubts the feasibility of the proposals at present.