IDEAS home Printed from https://ideas.repec.org/a/eee/retrec/v47y2014icp61-69.html
   My bibliography  Save this article

A micro founded approach to the valuation of benefits of freight travel time savings

Author

Listed:
  • Massiani, Jérôme

Abstract

This article investigates how freight travel time savings should be taken into account in cost–benefit analysis. The general setting of this article is to suppose that transport operators face a constraint on minimum travel time and to examine, in a comparative static framework, what is occurring when this minimum travel time is altered. The analysis takes into account three aspects of freight travel time savings that deserve specific attention and have been, to our knowledge, neglected in existing approaches: the distinction between make to order and make to stock production contexts, the distinction between travel time and transportation time and finally the impact of transport time savings on wider logistics organisation. In this context, the present contribution analyses how this change in the minimum travel time affects the different economic agents' tradeoffs between the duration and cost of the various operations used in production and transport activities. Our findings show that the benefits of travel time savings are at least equal to the sum of travel operating costs reduction, decrease of generalised immobilisation costs of the good (depreciation, financial immobilisation costs, and costs of damage insofar as are related to transport duration). We also draw the implications of this analysis for the valuation of projects that save travel time for freight.

Suggested Citation

  • Massiani, Jérôme, 2014. "A micro founded approach to the valuation of benefits of freight travel time savings," Research in Transportation Economics, Elsevier, vol. 47(C), pages 61-69.
    • Handle: RePEc:eee:retrec:v:47:y:2014:i:c:p:61-69
    DOI: 10.1016/j.retrec.2014.09.019
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0739885914000602
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.retrec.2014.09.019?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jerome Massiani & Romeo Danielis & Edoardo Marcucci, 2009. "Specific Vs Generic Goods:Implications For Transport Demand Analysis," Articles, International Journal of Transport Economics, vol. 36(3).
    2. de Jong, Gerard & Ben-Akiva, Moshe, 2007. "A micro-simulation model of shipment size and transport chain choice," Transportation Research Part B: Methodological, Elsevier, vol. 41(9), pages 950-965, November.
    3. Luca Zamparini & Aura Reggiani, 2007. "Freight Transport and the Value of Travel Time Savings: A Meta‐analysis of Empirical Studies," Transport Reviews, Taylor & Francis Journals, vol. 27(5), pages 621-636, March.
    4. María Feo-Valero & Leandro García-Menéndez & Rodrigo Garrido-Hidalgo, 2011. "Valuing Freight Transport Time using Transport Demand Modelling: A Bibliographical Review," Transport Reviews, Taylor & Francis Journals, vol. 31(5), pages 625-651.
    5. W. J. Baumol & H. D. Vinod, 1970. "An Inventory Theoretic Model of Freight Transport Demand," Management Science, INFORMS, vol. 16(7), pages 413-421, March.
    6. Shailendra C. Parikh & William S. Jewell, 1965. "Decomposition of Project Networks," Management Science, INFORMS, vol. 11(3), pages 444-459, January.
    7. Allen, Benjamin J. & Baumel, C. Phillip, 1994. "Expanding the Set of Efficiency Gains of a Highway Investment: Conceptual, Methodological and Practical Issues," Staff General Research Papers Archive 11705, Iowa State University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kim, T.Y. & Dekker, R. & Heij, C., 2016. "The value of express delivery services for cross-border e-commerce in European Union markets," Econometric Institute Research Papers EI2016-12, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    2. Musolino, Giuseppe & Rindone, Corrado & Polimeni, Antonio & Vitetta, Antonino, 2019. "Planning urban distribution center location with variable restocking demand scenarios: General methodology and testing in a medium-size town," Transport Policy, Elsevier, vol. 80(C), pages 157-166.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Evangelos Sambracos & Irene Ramfou, 2014. "The Effect of Freight Transport Time Changes on The Performance of Manufacturing Companies," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 119-138.
    2. Sambracos, Evangelos & Ramfou, Irene, 2015. "Do freight transport time savings translate to benefit for transport consuming companies?," MPRA Paper 68558, University Library of Munich, Germany.
    3. Phill Wheat & Alexander D. Stead & Yue Huang & Andrew Smith, 2019. "Lowering Transport Costs and Prices by Competition: Regulatory and Institutional Reforms in Low Income Countries," Sustainability, MDPI, vol. 11(21), pages 1-19, October.
    4. Johansson, Magnus & Vierth, Inge & Holmgren, Kristina & Cullinane, Kevin, 2023. "How will electrification and increased use of new fuels affect the effectiveness of freight modal shift policies?," Working Papers 2023:4, Swedish National Road & Transport Research Institute (VTI).
    5. Feo, María & Espino, Raquel & García, Leandro, 2011. "An stated preference analysis of Spanish freight forwarders modal choice on the south-west Europe Motorway of the Sea," Transport Policy, Elsevier, vol. 18(1), pages 60-67, January.
    6. Raphael Piendl & Martin Koning & François Combes & Gernot Liedtke, 2022. "Building latent segments of goods to improve shipment size modeling: Confirmatory evidence from France," Post-Print hal-04117547, HAL.
    7. Abate, Megersa & de Jong, Gerard, 2014. "The optimal shipment size and truck size choice – The allocation of trucks across hauls," Transportation Research Part A: Policy and Practice, Elsevier, vol. 59(C), pages 262-277.
    8. Khandaker Rasel Hasan & Wei Zhang & Wenming Shi, 2021. "Barriers to intermodal freight diversion: a total logistics cost approach," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 23(3), pages 569-586, September.
    9. Boris Goenaga & Victor Cantillo, 2020. "Willingness to pay for freight travel time savings: contrasting random utility versus random valuation," Transportation, Springer, vol. 47(2), pages 705-736, April.
    10. Piendl, Raphael & Liedtke, Gernot & Matteis, Tilman, 2017. "A logit model for shipment size choice with latent classes – Empirical findings for Germany," Transportation Research Part A: Policy and Practice, Elsevier, vol. 102(C), pages 188-201.
    11. Martin Koning & François Combes & Raphael Piendl & Gernot Liedtke, 2018. "Transferability of models for logistics behaviors: A cross-country comparison between France and Germany for shipment size choice [La transférabilité des modèles de comportements logistiques : Une ," Post-Print hal-01916081, HAL.
    12. Zhuo Zhang & Dezhi Zhang & Lóránt A. Tavasszy & Qinglin Li, 2020. "Multicriteria Intermodal Freight Network Optimal Problem with Heterogeneous Preferences under Belt and Road Initiative," Sustainability, MDPI, vol. 12(24), pages 1-24, December.
    13. Zhao, Miyuan & Chow, Joseph Y.J. & Ritchie, Stephen G., 2015. "An inventory-based simulation model for annual-to-daily temporal freight assignment," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 79(C), pages 83-101.
    14. Emeric Lendjel, 2013. "Pre- and end-haulage of containers in shipping chains: the neglected role of transaction costs in shippers' modal choices," Working Papers halshs-00978091, HAL.
    15. Emeric Lendjel, 2013. "Pre- and end-haulage of containers in shipping chains: the neglected role of transaction costs in shippers' modal choices," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00978091, HAL.
    16. Carballo, Jerónimo & Schaur, Georg & Graziano, Alejandro & Volpe Martincus, Christian, 2016. "Transit Trade," IDB Publications (Working Papers) 7688, Inter-American Development Bank.
    17. Dong, Chuanwen & Transchel, Sandra, 2020. "A dual sourcing inventory model for modal split transport: Structural properties and optimal solution," European Journal of Operational Research, Elsevier, vol. 283(3), pages 883-900.
    18. de Jong, Gerard & Kouwenhoven, Marco & Ruijs, Kim & van Houwe, Pieter & Borremans, Dana, 2016. "A time-period choice model for road freight transport in Flanders based on stated preference data," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 86(C), pages 20-31.
    19. Masiero, Lorenzo & Maggi, Rico, 2012. "Estimation of indirect cost and evaluation of protective measures for infrastructure vulnerability: A case study on the transalpine transport corridor," Transport Policy, Elsevier, vol. 20(C), pages 13-21.
    20. Engelson, Leonid & Fosgerau, Mogens, 2016. "The cost of travel time variability: Three measures with properties," Transportation Research Part B: Methodological, Elsevier, vol. 91(C), pages 555-564.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:retrec:v:47:y:2014:i:c:p:61-69. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/620614/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.