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Economic costs of air cargo flight delays related to late package deliveries

Author

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  • Liu, Yulin
  • Yin, Mogeng
  • Hansen, Mark

Abstract

We consider the cost of air cargo flight delay related to late package deliveries, which has received scant attention in previous research. We developed two models to estimate the costs of flight delay. First, we estimate a mixed-logit model to investigate the factors that influence late deliveries, with specific emphasis on flight on-time performance. Then we build a regression model to monetize the loss of late deliveries, using the hedonic approach to estimate the degradation in product value resulting from less reliable on-time package delivery. Estimates of flight delay costs for four representative US airports range from $8000 to $38,000 per flight-hour, with an average of about $20,000, which is roughly three times the direct operating cost per block-hour for air cargo flights estimated by GRA (2007), and also much higher than the unit flight delay cost related to passenger delay.

Suggested Citation

  • Liu, Yulin & Yin, Mogeng & Hansen, Mark, 2019. "Economic costs of air cargo flight delays related to late package deliveries," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 125(C), pages 388-401.
  • Handle: RePEc:eee:transe:v:125:y:2019:i:c:p:388-401
    DOI: 10.1016/j.tre.2019.03.017
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    References listed on IDEAS

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    1. Andrew Cook & Graham Tanner & Adrian Lawes, 2012. "The Hidden Cost of Airline Unpunctuality," Journal of Transport Economics and Policy, University of Bath, vol. 46(2), pages 157-173, May.
    2. Cook, Andrew & Tanner, Graham & Williams, Victoria & Meise, Gerhard, 2009. "Dynamic cost indexing – Managing airline delay costs," Journal of Air Transport Management, Elsevier, vol. 15(1), pages 26-35.
    3. Hansen, Mark & Huang, Yuanlin, 1997. "Road supply and traffic in California urban areas," Transportation Research Part A: Policy and Practice, Elsevier, vol. 31(3), pages 205-218, May.
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    5. Zou, Bo & Hansen, Mark, 2012. "Impact of operational performance on air carrier cost structure: Evidence from US airlines," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(5), pages 1032-1048.
    6. David Revelt & Kenneth Train, 1998. "Mixed Logit With Repeated Choices: Households' Choices Of Appliance Efficiency Level," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 647-657, November.
    7. Shams, Kollol & Asgari, Hamidreza & Jin, Xia, 2017. "Valuation of travel time reliability in freight transportation: A review and meta-analysis of stated preference studies," Transportation Research Part A: Policy and Practice, Elsevier, vol. 102(C), pages 228-243.
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