A proof of the relationship between optimal vehicle size, haulage length and the structure of distance-transport costs
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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Volume (Year): 35 (2001)
Issue (Month): 8 (September)
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- 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.
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- 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.
- 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.
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