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Choice of air cargo transshipment airport: an application to air cargo traffic to/from Northeast Asia

  • Ohashi, Hiroshi
  • Kim, Tae-Seung
  • Oum, Tae Hoon
  • Yu, Chunyan

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 a 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 the 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 1-h reduction in total transport and processing time for a particular origin–destination air cargo traffic would be more effective than a $1000 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.

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Article provided by Elsevier in its journal Journal of Air Transport Management.

Volume (Year): 11 (2005)
Issue (Month): 3 ()
Pages: 149-159

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Handle: RePEc:eee:jaitra:v:11:y:2005:i:3:p:149-159
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  1. Cullinane, Kevin & Toy, Neal, 2000. "Identifying influential attributes in freight route/mode choice decisions: a content analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 36(1), pages 41-53, March.
  2. Douglas, George W & Miller, James C, III, 1974. "Quality Competition, Industry Equilibrium, and Efficiency in the Price-Constrained Airline Market," American Economic Review, American Economic Association, vol. 64(4), pages 657-69, September.
  3. Steven T. Berry, 1994. "Estimating Discrete-Choice Models of Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 242-262, Summer.
  4. Oum, Tae Hoon & Park, Jong-Hun, 2004. "Multinational firms' location preference for regional distribution centers: focus on the Northeast Asian region," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 40(2), pages 101-121, March.
  5. Mori, Tomoya & Nishikimi, Koji, 2002. "Economies of transport density and industrial agglomeration," Regional Science and Urban Economics, Elsevier, vol. 32(2), pages 167-200, March.
  6. Malchow, Matthew B. & Kanafani, Adib, 2004. "A disaggregate analysis of port selection," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 40(4), pages 317-337, July.
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