The optimal shipment size and truck size choice – The allocation of trucks across hauls
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.
Volume (Year): 59 (2014)
Issue (Month): C ()
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Panayotis Christidis & Guillaume Leduc, 2009. "Longer and Heavier Vehicles for Freight Transport," JRC Working Papers JRC52005, Joint Research Centre (Seville site).
- Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-362, March.
- Mansur, Erin T. & Mendelsohn, Robert & Morrison, Wendy, 2008. "Climate change adaptation: A study of fuel choice and consumption in the US energy sector," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 175-193, March.
- Bhat, Chandra R. & Sen, Sudeshna, 2006. "Household vehicle type holdings and usage: an application of the multiple discrete-continuous extreme value (MDCEV) model," Transportation Research Part B: Methodological, Elsevier, vol. 40(1), pages 35-53, January.
- Shah, Nilopa & Brueckner, Jan K., 2012.
"Price and frequency competition in freight transportation,"
Transportation Research Part A: Policy and Practice,
Elsevier, vol. 46(6), pages 938-953.
- Shah, Nilopa & Brueckner, Jan K., 2011. "Price and Frequency Competition in Freight Transportation," University of California Transportation Center, Working Papers qt1n42k26q, University of California Transportation Center.
- Philippe Barla & Denis Bolduc & Nathalie Boucher & Jonathan Watters, 2010. "Information technology and efficiency in trucking," Canadian Journal of Economics, Canadian Economics Association, vol. 43(1), pages 254-279, February.
- Philippe Barla & Denis Bolduc & Nathalie Boucher & Jonathan Watters, 2008. "Information technology and efficiency in trucking," Working Papers Department of Economics ces0813, KU Leuven, Faculty of Economics and Business, Department of Economics.
- de Jong, Gerard & Ben-Akiva, Moshe, 2007. "A micro-simulation model of shipment size and transport chain choice," Transportation Research Part B: Methodological, Elsevier, vol. 41(9), pages 950-965, November.
- François Bourguignon & Martin Fournier & Marc Gurgand, 2007. "Selection Bias Corrections Based On The Multinomial Logit Model: Monte Carlo Comparisons," Journal of Economic Surveys, Wiley Blackwell, vol. 21(1), pages 174-205, 02.
- François Bourguignon & Martin Fournier & Marc Gurgand, 2004. "Selection Bias Corrections Based on the Multinomial Logit Model: Monte-Carlo Comparisons," DELTA Working Papers 2004-20, DELTA (Ecole normale supérieure).
- François Bourguignon & Marc Gurgand & Martin Fournier, 2007. "Selection bias corrections based on the multinomial logit model: Monte Carlo comparisons," Post-Print halshs-00201372, HAL.
- Inaba, Fred S & Wallace, Nancy E, 1989. "Spatial Price Competition and the Demand for Freight Transportation," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 614-625, November.
- Erik Lindqvist & Roine Vestman, 2011. "The Labor Market Returns to Cognitive and Noncognitive Ability: Evidence from the Swedish Enlistment," American Economic Journal: Applied Economics, American Economic Association, vol. 3(1), pages 101-128, January.
- Lindqvist, Erik & Westman, Roine, 2009. "The Labor Market Returns to Cognitive and Noncognitive Ability: Evidence from the Swedish Enlistment," Working Paper Series 794, Research Institute of Industrial Economics.
- Schmertmann, Carl P., 1994. "Selectivity bias correction methods in polychotomous sample selection models," Journal of Econometrics, Elsevier, vol. 60(1-2), pages 101-132.
- Thomas N. Hubbard, 2000. "The Demand for Monitoring Technologies: The Case of Trucking," The Quarterly Journal of Economics, Oxford University Press, vol. 115(2), pages 533-560.
- Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
- Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-161, January.
- McCann, Philip, 2001. "A proof of the relationship between optimal vehicle size, haulage length and the structure of distance-transport costs," Transportation Research Part A: Policy and Practice, Elsevier, vol. 35(8), pages 671-693, September.
- Shirley, Chad & Winston, Clifford, 2004. "Firm inventory behavior and the returns from highway infrastructure investments," Journal of Urban Economics, Elsevier, vol. 55(2), pages 398-415, March.
- Lung-Fei Lee, 1982. "Some Approaches to the Correction of Selectivity Bias," Review of Economic Studies, Oxford University Press, vol. 49(3), pages 355-372.
- W. J. Baumol & H. D. Vinod, 1970. "An Inventory Theoretic Model of Freight Transport Demand," Management Science, INFORMS, vol. 16(7), pages 413-421, March.
- Gordon B. Dahl, 2002. "Mobility and the Return to Education: Testing a Roy Model with Multiple Markets," Econometrica, Econometric Society, vol. 70(6), pages 2367-2420, November.
- Gordon B. Dahl, 2002. "Mobility and the Return to Education: Testing a Roy Model with Multiple Markets," RCER Working Papers 488, University of Rochester - Center for Economic Research (RCER).
- Blumenfeld, Dennis E. & Burns, Lawrence D. & Diltz, J. David & Daganzo, Carlos F., 1985. "Analyzing trade-offs between transportation, inventory and production costs on freight networks," Transportation Research Part B: Methodological, Elsevier, vol. 19(5), pages 361-380, October.
- Thomas N. Hubbard, 2003. "Information, Decisions, and Productivity: On-Board Computers and Capacity Utilization in Trucking," American Economic Review, American Economic Association, vol. 93(4), pages 1328-1353, September.
- George P. Baker & Thomas N. Hubbard, 2003. "Make Versus Buy in Trucking: Asset Ownership, Job Design, and Information," American Economic Review, American Economic Association, vol. 93(3), pages 551-572, June. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:59:y:2014:i:c:p:262-277. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If references are entirely missing, you can add them using this form.