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Choice of Air Cargo Transshipment Airport: An Application to Air Cargo Traffic to/from Northeast Asia

Author

Listed:
  • Hiroshi Ohashi

    (Faculty of Economics, University of Tokyo)

  • Tae-Seung Kim

    (Korea Transport Institute)

  • Tae Hoon Oum

    (Sauder School of Business, University of British Columbia)

  • Chunyan Yu

    (Sauder School of Business, University of British Columbia)

Abstract

Based on a unique data set of 760 air cargo transshipment routings to/from the Northeast Asian region in 2000, this paper applies an aggregate form of multinomial logit model to identify the critical factors influencing air cargo transshipment route choice decisions. The analysis focuses on the trade-off between monetary cost and time cost while considering other variables relevant for choice of transshipment airport. The estimation method considers the presence of unobserved attributes, and corrects for resulting endogeneity via a two-stage least squares estimation using instrumental variables. Our empirical results show that choice of air cargo transshipment hub is more sensitive to time cost than the monetary costs such as landing fees and line-haul price. For example, our simulation results suggest that a one-hour reduction in total transport and processing time for a particular O-D air cargo traffic would be more effective than a US$1,000 reduction in airport charges. This suggests that it is important to reduce air cargo connecting time at an airport via adequate investment in capacity and automation even by increasing landing and other airport charges.

Suggested Citation

  • Hiroshi Ohashi & Tae-Seung Kim & Tae Hoon Oum & Chunyan Yu, 2004. "Choice of Air Cargo Transshipment Airport: An Application to Air Cargo Traffic to/from Northeast Asia," CIRJE F-Series CIRJE-F-291, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2004cf291
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    References listed on IDEAS

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