The responsibilities of freight carriers and other agents in the generation of freight externalities: Implications for addressing climate change

This research sheds light into an important and overlooked aspect of urban freight management and planning: the impacts of the decisions made by shippers, receivers, transportation and land use agencies, the real-estate sector, and other agents—referred to as non-carrier agents, or NCAs—on the generation of freight externalities. The paper is based on the insight that, since freight carriers must meet the constraints set by these agents, NCAs’ decisions could force the carriers to create externalities above and beyond those that the carriers would generate if they had complete control over their operations. As part of the research, the paper: identifies key NCAs’ decisions that could negatively affect the operational performance and the externalities produced by freight carriers; analyses the interactions between carriers and NCAs to formally characterize their interactions; uses standard game theory to define a new game—the Supply Chain Game—that describes the interactions among the agents involved in supply chains; identifies the equilibrium solutions for the various interactions associated with key decisions that affect freight carrier operations; computes Shapley Values to allocate the responsibilities for the freight externalities using test cases based on real-life supply chains; and builds on the research findings to identify actions to dramatically mitigate freight emissions. The research makes three important contributions spanning three different dimensions: (1) the empirical quantification of the responsibilities, (2) the formulation of the Supply Chain Game (methodology), and (3) the definition of the priority actions to reduce freight emissions (policy). Taken together, these contributions establish the necessity of using holistic approaches to mitigate freight externalities, including emissions in the era of climate change.