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The optimal shipment size and truck size choice – The allocation of trucks across hauls

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  • Abate, Megersa
  • de Jong, Gerard

Abstract

There has been a growing interest in understanding how firms allocate their trucks across hauls, and how this allocation changes under various economic environments. This study investigates how variations in route/haul, carrier and vehicle characteristics affect the optimal vehicle size choice and the associated choice of shipment size. We show that the two choices are derived from the same optimization problem. There can be a continuum of shipment sizes, but decision-makers in freight transport have to choose from a limited number of vehicle alternatives. Therefore, we use a discrete–continuous econometric model where shipment size is modeled as a continuous variable, and vehicle size/type choice as a discrete variable. The results indicate that when faced with higher demand, and during longer trips firms are more likely to use heavier vehicles and ship in larger quantities which suggest that firms are realizing economies of scale and economies of distance. The study also discusses the effect of vehicle operating cost on the vehicle selection process and its policy implications.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:transa:v:59:y:2014:i:c:p:262-277
    DOI: 10.1016/j.tra.2013.11.008
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    3. Abate , Megersa & Vierth , Inge & Karlsson , Rune & de Jong , Gerard & Baak , Jaap, 2016. "Estimation and implementation of joint econometric models of freight transport chain and shipment size choice," Working papers in Transport Economics 2016:1, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
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    6. Holguín-Veras, José & Kalahasthi, Lokesh & Campbell, Shama & González-Calderón, Carlos A. & (Cara) Wang, Xiaokun, 2021. "Freight mode choice: Results from a nationwide qualitative and quantitative research effort," Transportation Research Part A: Policy and Practice, Elsevier, vol. 143(C), pages 78-120.
    7. Abate, Megersa & Vierth, Inge & de Jong , Gerard, 2014. "Joint econometric models of freight transport chain and shipment size choice," Working papers in Transport Economics 2014:9, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    8. Raphael Piendl & Martin Koning & François Combes & Gernot Liedtke, 2022. "Building latent segments of goods to improve shipment size modeling: Confirmatory evidence from France," Post-Print hal-04117547, HAL.
    9. Piendl, Raphael & Matteis, Tilman & Liedtke, Gernot, 2019. "A machine learning approach for the operationalization of latent classes in a discrete shipment size choice model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 121(C), pages 149-161.
    10. Sahu, Prasanta K. & Qureshi, Danish & Pani, Agnivesh, 2022. "Examining commercial vehicle fleet ownership decisions and the mediating role of freight generation: A structural equation modeling assessment," Transport Policy, Elsevier, vol. 126(C), pages 26-33.
    11. Usman Ahmed & Matthew J. Roorda, 2023. "Joint and sequential models for freight vehicle type and shipment size choice," Transportation, Springer, vol. 50(5), pages 1613-1629, October.
    12. Günay, Gürkan, 2023. "Shipment size and vehicle choice modeling for road freight transport: A geographical perspective," Transportation Research Part A: Policy and Practice, Elsevier, vol. 173(C).
    13. Martin Koning & François Combes & Raphael Piendl & Gernot Liedtke, 2018. "Transferability of models for logistics behaviors: A cross-country comparison between France and Germany for shipment size choice [La transférabilité des modèles de comportements logistiques : Une ," Post-Print hal-01916081, HAL.
    14. Irannezhad, Elnaz & Prato, Carlo & Hickman, Mark, 2019. "A joint hybrid model of the choices of container terminals and of dwell time," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 121(C), pages 119-133.
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    16. Kalahasthi, Lokesh & Holguín-Veras, José & Yushimito, Wilfredo F., 2022. "A freight origin-destination synthesis model with mode choice," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 157(C).
    17. Piendl, Raphael & Liedtke, Gernot & Matteis, Tilman, 2017. "A logit model for shipment size choice with latent classes – Empirical findings for Germany," Transportation Research Part A: Policy and Practice, Elsevier, vol. 102(C), pages 188-201.
    18. Keya, Nowreen & Anowar, Sabreena & Eluru, Naveen, 2019. "Joint model of freight mode choice and shipment size: A copula-based random regret minimization framework," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 125(C), pages 97-115.
    19. Megersa Abate & Inge Vierth & Rune Karlsson & Gerard Jong & Jaap Baak, 2019. "A disaggregate stochastic freight transport model for Sweden," Transportation, Springer, vol. 46(3), pages 671-696, June.
    20. Leise Kelli de Oliveira & Bruno Vieira Bertoncini & Carla de Oliveira Leite Nascimento & Lara Braide Rocha & Larissa Almeida Matias de Lima Batista & Leonardo Ventorim Cellin, 2019. "Factors Affecting the Choice of Urban Freight Vehicles: Issues Related to Brazilian Companies," Sustainability, MDPI, vol. 11(24), pages 1-11, December.

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