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Directional imbalance in freight rates: evidence from Japanese inter-prefectural data

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  • Kiyoyasu Tanaka
  • Kenmei Tsubota

Abstract

Freight rates often differ by the direction of freight transportation. To investigate the determinants of a directional imbalance in freight rates, we show that a deviation between front- and back-haul freight rates depends on both density economies and directional imbalances in transport flows. Using panel data on truck freight transportation in Japan, we find that a 10% increase in the front-haul transport flow relative to back-haul transport flow leads to a 1.3% decrease in the front-haul freight rate relative to back-haul freight rate. This suggests that the negative effect of density economies in front-haul transport flow dominates the positive effects of both density economies in back-haul transport flow and the directional imbalance in transport flows.

Suggested Citation

  • Kiyoyasu Tanaka & Kenmei Tsubota, 2017. "Directional imbalance in freight rates: evidence from Japanese inter-prefectural data," Journal of Economic Geography, Oxford University Press, vol. 17(1), pages 217-232.
    • Handle: RePEc:oup:jecgeo:v:17:y:2017:i:1:p:217-232.
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    File URL: http://hdl.handle.net/10.1093/jeg/lbw005
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    Cited by:

    1. Tsubota, Kenmei, 2015. "Agglomeration and directional imbalance of freight rates : the role of density economies in the transport sector," IDE Discussion Papers 488, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    2. Francesco Di Comite, 2018. "Transport liberalization and regional imbalances with endogenous freight rates," JRC Research Reports JRC92386, Joint Research Centre.
    3. 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.
    4. Xu, Hangtian & Itoh, Hidekazu, 2016. "Density economies and transport geography: Evidence from the container shipping industry," MPRA Paper 75580, University Library of Munich, Germany.
    5. Xu, Hangtian & Itoh, Hidekazu, 2018. "Density economies and transport geography: Evidence from the container shipping industry," Journal of Urban Economics, Elsevier, vol. 105(C), pages 121-132.
    6. Charlotte Emlinger & Amélie Guillin, "undated". "Cheaper and Faster: The Role of Air Services Agreements on Transportation," Working Papers 2023-17, CEPII research center.

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    More about this item

    Keywords

    Freight rates; density economies; trade imbalance; truck freight transportation;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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