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Discrete Model of Freight Mode and Shipment Size Choice Megersa Abate and Inge Verth Swedish National Road and Transport Research Institute Gerard de Jong University of Leeds Presentation Notes: Presented by Megersa Abate, Swedish National Road and Transport Research Institute. The model is based on a deterministic cost model, with the minimization of total annual logistics costs. The current model lacks two main elements: it does not account for other determinants of shipment size and chain choices and it lacks a stochastic component. The data source was the national commodity data flow of about 2.8 million shipments. This model includes information for supply chain, weight, and infrastructure variables. Initial results show a low elasticity for transport costs for most modes. Abstract The main feature of the current Swedish national freight model system (SAMGODS model) is incorporation of a logistic component in the traditional freight demand modeling. The logistics module of the SAMGODS model estimates frequency/shipment size choice and transport chain choice (transport chain and mode choices and use of transshipment). Logistical decisions of firms are incorporated in the modeling process based on the shipment size optimization theory. According to this theory, firms are assumed to minimize total logistics costs by trading off inventory holding costs and transport costs. Judged by international standards in freight transport modeling, the SAMGODS model is relatively modern. Its logistic module, however, lacks two main elements. First, it does not account for main determinants of shipment size and transport chain choices other than cost, that is, decisions are solely based on cost consideration. Second, the model is deterministic and lacks a stochastic component. In order to improve the prediction of the model, logistical decisions should be modeled taking into account these two elements. A full random utility logistic model which accounts for this was planned but has not yet been estimated on disaggregated data (de Jong and Ben-Akiva 2007). This project is a first step toward estimating a full random utility logistic model. The researchers will formulate a model of transport chain and shipment size choice using the 2004â 2005 Swedish Commodity Flow Survey. The main econometric work in this project involves modeling the interdependence between shipment size and transport chain choices using a joint (e.g., discrete-continuous) econometric model. Parameter estimates from this model will later be used for estimation of a full random utility logistic model. They will also be used to estimate transport time and cost elasticities to analyze policy outcomes. 44
Reference de Jong, G., and M. Ben-Akiva. A Micro-Simulation Model of Shipment Size and Transport Chain Choice. Transportation Research Part B, Vol. 41, Issue 9, 2007, pp. 950â965. 45