Modelling Freight Transport

Lorant Tavasszy, Gerard De Jong

• Publisher: Elsevier
• Year: 2013
• ISBN:
  9780124167087
• Topic: Technology & Engineering
• Subtopic: Transportation & Navigation
• Index: Technology & Engineering

Freight Transport Modelling is a unique new reference book that provides insight into the state-of-the-art of freight modelling. Focusing on models used to support public transport policy analysis, Freight Transport Modelling systematically introduces the latest freight transport modelling approaches and describes the main methods and techniques used to arrive at operational models.

As freight transport has grown exponentially in recent decades, policymakers now need to include freight flows in quantitative evaluations of transport systems. Whereas early freight modelling practice was inspired by passenger transport models, by now it has developed its separate stream of methods and techniques inspired by disciplines such as economic geography and supply chain management.

Besides summarizing the latest achievements in fundamental research, this book describes the state of practice and advises practitioners on how to cope with typical challenges such as limitations in data availability.

• Uniquely focused book exploring the key issues and logistics of freight transport modelling
• Highlights the latest approaches and describes the main methods and techniques used to arrive at operational models
• Summarizes fundamental research into freight transport modeling, as well as current practices and advice for practitioners facing day-to-day challenges

1

Introduction

Lóránt Tavasszy^a and Gerard de Jong^b, ^aTNO, Delft and Delft University of Technology, The Netherlands, ^bInstitute for Transport Studies, University of Leeds, UK; Significance BV, The Hague, The Netherlands; and Centre for Transport Studies, VTI/KTH, Stockholm, Sweden

In this introductory chapter we provide a concise overview of the state of the art of mathematical models of the freight transport system, focussing mainly on areas where it deviates from passenger transport models. We introduce a conceptual model of the freight transport system that includes production, consumption and trade, as well as inventory and transport logistics. A brief explanation is given of the disciplinary background and the state of the art of freight modelling in these areas, and the different theoretical perspectives behind freight transport models are highlighted. Finally we provide an introduction to the different chapters of the book. The chapters largely follow the conceptual model introduced here and include overarching topics on data issues, simplified models and application for policy.

Keywords

freight modelling; logistics; state of the art; textbook

1.1 Background and Objectives

Freight transport is an essential part of our economy as it fulfils a unique service within supply chains, bridging the distances between spatially separated places of supply and demand. As is the case with passenger transport, accessibility of places for freight is vital or the economic development of society. Freight transport flows have been growing continuously in the past, due to an increase in population, falling trade barriers and declining transport costs. In addition, the growth of freight flows is propelled by increasing consumption levels and the customisation of products and services. This growth has been facilitated by major infrastructure extensions including roads, railways, waterways, ports and storage and transhipment activities. In recent decades, however, freight flows have also become an area of concern to public policy in a very different way. This relates to the aim of protecting the environment from the negative side effects (e.g. health-related local emissions, greenhouse gas emissions, traffic accidents) of freight transport growth, as is also the case in passenger transport.

Our final goal with this book is to disseminate better tools to evaluate freight transport policies. We give a concise description of the state of the art of mathematical models of the freight transport system, focussing mainly on areas where it deviates from passenger transport models. Such mathematical models can support freight transport policy design in different ways, including:

• Description of flows in a base year and explanation of the drivers of freight transport,

• Forecasting of flows or exploration of alternative futures,

• Performance assessment of freight systems, e.g. for cost-benefit analysis,

• Design and optimisation of freight systems.

Freight transport models have been around in transport research since the early 1960s, and appeared more or less in parallel with passenger transport models. Despite the fact that the underlying economic and statistical theories are similar and date back much further, the application and development of freight models took place much more slowly. This was partly due to the above-mentioned late appearance of freight transport as a major area of public policy. More importantly, perhaps, it was the lack of data, or appropriate behavioural or applied economic theory that distinguished the drivers of freight transport from those of passenger transport. In the 1970s, freight was largely treated by the research community in a simplistic way, as a separate class of passengers, leaning on the same theoretical underpinning and the same applied models. At present, in the community of practitioners, it largely still is. In the meantime, however, new freight-related disciplines have emerged, like logistics and supply chain management, aiming at improving firm logistics, according to principles of optimisation of service levels and minimisation of costs. Taking these new disciplines as the basis for developing a theoretical underpinning of freight transport models, a whole generation of new freight modelling approaches developed in the late 1980s and early 1990s. Surprisingly, these approaches have hardly made it beyond the scientific literature, due to heavy data requirements or simply a lack of demand by policy makers. In current times, with increasing pressure on government to effectively deal with growing freight flows, the demand is increasing, however, and the available concepts deserve to be more widely known and used.

1.2 Conceptual Framework for Freight Decisions

We will focus on the development of descriptive, empirical models that are built on theories of freight systems behaviour and can be statistically calibrated and validated. The first questions we ask when we go into the behaviour of the actors in the freight system is who the decision-makers are, what decisions they take and how (through which markets) they affect the functioning of the freight transport system.

As we are concerned with long-term effects of transport policy, we also need to focus on changes in the freight transport system on the longer term. The strategic decisions in freight transport involve major investments in assets, such as production plants, are related to longer design or use cycles (e.g. patents and licences) and cannot be reviewed frequently (e.g. because of longer-term contracts or regulations). Such decisions will be made for the longer term, typically once every 5–10 years. The tactical decisions are reviewed on a more frequent basis (typically months to years), as they concern relatively small investments (e.g. a warehouse or a truck), but still have a lag time because the decision is linked to investments or agreements with external parties (e.g. outsourcing contracts, service agreements). Operational decisions are those that can be taken at the discretion of the producing or service providing firm itself and have a short review period in the planning and management cycles (in the order of days to months, like the routing of freight). In line with this distinction between shorter and longer-term decisions, we distinguish three main layers or markets of the freight system (see e.g. other market-oriented frameworks in Manheim (1979), Wandel & Ruijgrok (1993), Liedtke, Tavasszy, & Wisetjindawat (2009), Roorda, Cavalcante, McCabe, & Kwan (2010), Tavasszy et al. (2012), de Jong et al. (2013) and Savy & Burnham (2013)):

1. Exchange of goods: production, consumption and trade (the commodity market),

2. Inventory networks (the market for inventory logistics services),

3. Choice of transport modes, trips and routes (the market for transport logistics services).

This framework should not be read as the freight version of the four-step passenger transport modelling framework. It is meant as a template for systematic discussion of many decisions, contained within these markets, allowing us to focus on some specific decisions and to integrate others. In addition, the reader should note some substantive differences. Because of the close theoretical relationship between freight generation and spatial distribution, we have combined these into one layer. Also, choice problems related to inventories (the second layer) are specific for freight. Passengers are not stored for later delivery and are (usually) not underway without a destination, whereas freight often is. This phenomenon cannot be tackled by the other decisions.

A short description of these layers, including their demand and supply sides and market mechanisms follows below. We discuss the main decisions, the agents and their importance for freight transport.

1.2.1 Goods: Production, Consumption and Trade

Production and consumption revolve around the actors that form the demand and the supply for goods: producers and consumers. They are both on the sending and the receiving end for freight. Note that producers are on the receiving end of goods flows, such as raw materials and other inputs for manufacturing, and consumers are on the sending end of freight when it concerns waste or return shipments. The decision-makers at firms are the managers responsible for R&D, product, location and plant management etc. The decisions at hand include the location(s) for production, the deployment of factors of production, such as land, goods and services, labour and capital; they will determine the nature of products being made, the volumes of production etc. Consumers and households shape the final demand for goods; their decisions include, by analogy, the residential location, their consumption patterns and the way they deal with waste. An important decision at the level of individual firms and consumers that has to be highlighted here is that of shipment size or order size. We define these two terms in this book as synonyms, so a ‘shipment’ refers to a bundle of goods that is ordered and delivered together from a producer or warehouse. A transport vehicle or vessel may contain one or multiple shipments (e.g. for several receivers). The total amount of goods in the vehicle is called the ‘payload’.

As consumers make trade-offs between the number of times to go the supermarket and the volume of their groceries, so do firms. Trade builds on agreements for the transfer of ownership or delivery of service. It determines the spatial boundaries of the flows of goods, and as such drives the spatial organisation of movement of goods. The choice of trading partner and trading volume is also a composite of many underlying decisions. These include the sourcing partners or shopping locations from the demand perspective, from the supply perspective this includes the decisions on sales areas and the price setting for products. The decision-making agents are the managers in industry responsible for sales, marketing or sourcing. They usually belong to the producers, resellers or retailers of the products in question, or in case of goods that involve heavy speculation, professional traders to which this function is outsourced. Consumers and their households are also decision-making agents as they buy products and services. Finally, government also directly influences trade as an agent in the market through import barriers, international taxation rules, customs regulations etc., and by its own production and consumption.

1.2.2 Inventory Networks

Inventory networks are a spatial form of organisation of inventories. Given the spatial patterns and volumes of trade, storage and (de)consolidation of flows may occur at intermediate locations that are in between places of production and consumption. The main purposes of these inventories is to keep logistics costs low by bundling inventories and transport flows and to maintain high service levels with proximity to markets. Whether or not such intermediate inventories are necessary or worthwhile depends on many factors, including the physical characteristics of goods that determine logistics costs structures (e.g. perishability) and the service requirements. The effect that these intermediate inventories have on flows is that the spatial patterns of trade are changed, i.e. new origins and destinations for transport are created. In addition, shipment sizes are determined. These decisions are usually taken by logistics managers of the firms that send or receive goods. Sometimes the role of a logistics manager is partly outsourced to one or more professional service firms (logistics service providers), in which case the decision on locations and volumes of intermediate stocks is taken jointly for several firms.

1.2.3 Transport Organisation

The choice of the modality or mode of transport (road, rail, water, air) is the most discussed point of intervention for freight transport policies. This is in sharp contrast with the industry, however, where the decision is often taken implicitly, or without much contemplation. This can be explained by the fact that, given the dependence on available infrastructures and the transport requirements of the goods, the number of realistic choices for a firm is often limited (Jordans et al., 2006). At the same time, firms are not unwilling to reconsider the mode of transport, as there are substantial differences in scale (and thus costs) and performance between alternative modes. Each mode of transport offers a diverse set of specialised means of transport (=vehicle types within a given mode, e.g. lorries of different sizes), tuned to different good types (e.g. bulk load or unit load) and shipment sizes. As the choice of means of transport is less constrained by infrastructure availability, firms very intensively use this decision to optimise transport. The decision to invest in vehicles is of course a different, longer term one than the assignment of shipments to vehicle or ship types. Note that the choice of mode will often coincide with the decision on shipment size. As with inventories, the agents responsible for logistics management take the decision of mode of transport. This can be outsourced to a logistics service provider or forwarder.

The actual dispatch of shipments, once the mode and means of transport are known, is organised in space and time in the routing and scheduling decision. Transport planners at the shipping company or the carrier (in case of outsourced transport services) carry out this transport planning on a weekly or daily basis. The route followed between intermediate points of loading and unloading may also be suggested by the transport planner to the driver, although the driver will deviate from the route if necessary. There can be multiple origins per destination (n:1, e.g. a retailers distribution centre being served by many producers), multiple destinations per origin (1:n, e.g. a producer who wants to deliver to several clients wi...

Table of contents

• Cover image
• Title page
• Table of Contents
• Copyright
• List of Contributors
• 1. Introduction
• 2. Modelling Inter-Regional Freight Demand with Input–Output, Gravity and SCGE Methodologies
• 3. Freight Generation and Freight Trip Generation Models
• 4. Distribution Structures
• 5. Inventory Theory and Freight Transport Modelling
• 6. Mode Choice Models
• 7. Vehicle-Trip Estimation Models
• 8. Urban Freight Models
• 9. Freight Service Valuation and Elasticities
• 10. Data Availability and Model Form
• 11. Comprehensive Versus Simplified Models