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A proof of the relationship between optimal vehicle size, haulage length and the structure of distance-transport costs

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  • McCann, Philip

Abstract

This paper deals with two interrelated questions, namely the optimum size of a vehicle or vessel, and the structure of transport costs with respect to haulage distance. The relationship between these two questions has not been coherently dealt with previously in the literature, and the heuristic attempts at doing so have lead to both theoretical and empirical anomalies. This paper adopts an inventory optimisation approach in order to show that both of these questions can be treated in a unified manner and this allows us to show, first, that under very general conditions the optimum size of a ship increases with the haulage distance and haulage weight, and second, that the observed structure of transport costs with respect to the haulage distance and quantity is itself a result of this optimisation problem.

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Bibliographic Info

Article provided by Elsevier in its journal Transportation Research Part A: Policy and Practice.

Volume (Year): 35 (2001)
Issue (Month): 8 (September)
Pages: 671-693

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Handle: RePEc:eee:transa:v:35:y:2001:i:8:p:671-693

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  1. Allen, W. Bruce & Mahmoud, Mohamed M. & McNeil, Douglas, 1985. "The importance of time in transit and reliability of transit time for shippers, receivers, and carriers," Transportation Research Part B: Methodological, Elsevier, vol. 19(5), pages 447-456, October.
  2. McCann, Philip & Fingleton, Bernard, 1996. "The Regional Agglomeration Impact of Just-in-Time Input Linkages: Evidence from the Scottish Electronics Industry," Scottish Journal of Political Economy, Scottish Economic Society, vol. 43(5), pages 493-518, November.
  3. Allen, W Bruce & Liu, Dong, 1995. "Service Quality and Motor Carrier Costs: An Empirical Analysis," The Review of Economics and Statistics, MIT Press, vol. 77(3), pages 499-510, August.
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Cited by:
  1. Philip McCann & Jacques Poot & Lynda Sanderson, 2010. "Migration, relationship capital and international travel: theory and evidence," Journal of Economic Geography, Oxford University Press, vol. 10(3), pages 361-387, May.
  2. Maarten Bosker & Harry Garretsen, 2007. "Trade Costs, Market Access and Economic Geography: Why the Empirical Specification of Trade Costs Matters," CESifo Working Paper Series 2071, CESifo Group Munich.
  3. Jonkeren, Olaf & Jourquin, Bart & Rietveld, Piet, 2011. "Modal-split effects of climate change: The effect of low water levels on the competitive position of inland waterway transport in the river Rhine area," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(10), pages 1007-1019.
  4. Christopher Kurz & Mine Z. Senses, 2013. "Importing, exporting and firm-level employment volatility," Finance and Economics Discussion Series 2013-44, Board of Governors of the Federal Reserve System (U.S.).
  5. Yilmazkuday, Hakan, 2009. "Distribution of Consumption, Production and Trade within the U.S," MPRA Paper 16361, University Library of Munich, Germany.
  6. Hakan Yilmazkuday, 2010. "Agglomeration and Trade: State-Level Evidence from U.S. Industries," DETU Working Papers 1001, Department of Economics, Temple University.
  7. Janic, Milan, 2008. "An assessment of the performance of the European long intermodal freight trains (LIFTS)," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(10), pages 1326-1339, December.
  8. Sahin, Bahri & Yilmaz, Huseyin & Ust, Yasin & Guneri, Ali Fuat & Gulsun, BahadIr, 2009. "An approach for analysing transportation costs and a case study," European Journal of Operational Research, Elsevier, vol. 193(1), pages 1-11, February.
  9. Christopher Kurz & Mine Z. Senses, 2013. "Importing, Exporting And Firm-Level Employment Volatility," Working Papers 13-31, Center for Economic Studies, U.S. Census Bureau.
  10. 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.

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