172 Transport Economics

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2000 Antwerpen

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Transport Economics

Samenvatting

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172

PartIII:Transportsupplyanddemand

10.Demandfortransport

1. Introduction

Whatistransportmodelling? - Mathematicalrepresentationandsimplificationofreality;forecastsandestimations - Focusonkeyrelationshipsandavailabledata - Passengertransport - Freighttransport - Combinationofpassengerandfreighttransport - Tomakeforecasts - Policyguidance,inputtocostͲbenefitanalysis,resultsareinputtobusinessplan(ifusedand interpretedcorrectly) - Instrumentformakingdecisions  Î Thischapter:analysisandforecastsoftransportdemand,withadistinctionbetween passengerandfreighttransport. їPurpose:toprovideascientificinsightintothedeterminantsofmobilitygrowth +toolformakingconditionalforecastsoftransportdemandlevels. Suchforecastscanhelpusevaluatetheexpectedconsequencesofalternativetransport scenariosandstrategies. Î Focus:numberofempiricalstudiesinordertoillustratethelevelofmobilitygrowth.  Researchintotransportdemand:largelymodelͲbased(+mostempiricalstudiesareconcernedwith passengertransport)їthreetypesofmodels: 1) ClassicalfourͲstagemodels: x Oftenusedinurbantransportstudies x Mostlyusesaggregatedata 2) MicroeconomicapproachoftravelͲchoicebehaviour: x Supportedbytherandomutilitytheory x Travellerbehaviourisexplainedmostlyatindividuallevel 3) ActivityͲbasedapproach: x TravelisdayͲtoͲdaybehaviour(travelpatterns)relatedtoandderivedfrom variationsinlifestyleandthedegreeofactiveparticipation  Passengerdemandmodels:assumptionthatindividualtravellersmaximisetheirutility. Freightdemandmodels:transportfirmsstrivetominimisecosts. Î Produceraimsformaximisationofproductionatagivencostlevel andminimisationofcostsatagivenproductionlevel.     

2. Aggregatemodels

 2.1 TheMethodologicalFramework  Transportplanningprocessїbasedonmodelling.Differentcomponentsoftravelortransport behaviour(decisionsyouhavetomake): x Decisionofwhetherornottotravelortohavefreighttransportedtoacertaindestination x Choiceofdestination x Choiceoftransportmode x Choiceofroute Î Transportuserwilltakethesedecisionssimultaneously,intransportdemandmodelsthey areusuallyconsideredinsequence.Outputofeachphase=inputforthenextphase. Î Tripmatrix:aschemeconsistingoffourconsecutivephases.  Î xij:numberoftripsfromzoneitozonej Ri:totalamountoftrafficdepartingfromzoneiRi=σூ௝ୀଵ xij Kj:totalamountoftrafficarrivinginzonejKj=σூ௜ୀଵ xij  X:numberofpassengerstransportedintheareastudied(sumofallrowtotalsandsumofall  columntotals).X=σ_௜ Riσ௝ Kj Foursequentiallevelsofdemanddetermination: x Tripgeneration: o determinationofthetotaltransportquantityXaswellastherowandcolumntotals KjandRi,ortheincomingandoutgoingtrafficperregion x Tripdistribution:

o DistributionoftherowandcolumntotalsKjandRiovertheseparateflowsxij

betweenthezones x Modalsplit:

o Determinationoftheshareofthemodesinthetrafficflowsxij

x Ifrequired:trafficconversion

x Assignmenttoinfrastructure: o Choiceofroutefortransportationbyeachofthemodes,sothatonecandetermine thetrafficburdenontheinfrastructurenetwork.           Î Maybetranslatedintoatablespecifyingtherequiredinputandoutput:

Model Input Output

1Tripgeneration ͲGeographicaldistributionofpopulation ͲLocationofeconomicactivities Ͳ… Outgoingtraffic(Ri) Incomingtraffic(Kj) 2Tripdistribution ͲOutputtripgeneration ͲTransportcosts Ͳ… Trafficflowsxij 3Modalsplit ͲOutputtripdistribution ͲCostsandrates ͲTraveltimes Ͳ… Modalshares 4Assignment ͲOutputmodalsplit ͲTimesavingsanddistancesavings Ͳ… Assignmenttoinfrastructure  Î Thesefourlevelsofdemanddeterminationcorrespondtofoursuccessiveoperational phases. Î Foreachphasethereisasubmodelthatexplainspartofthedemandprocess.Thesecanbe usedtoresolvespecifictransportissues.       

2.2 TripGeneration Purpose:topredictthenumberoftripswithoriginanddestinationineachofthezones.Starting fromrowtotals,howthesetotalswillevolveinthefuture.

2.2.1 Tripgenerationinpassengertransport

Determiningfactors(ofnumberofpassengerstravellingtoandfromazone): x Numberofinhabitantsandtherelatedfactorshouseholdsizeandcomposition x Carownership x Employment x Income x Distanceofvariouscentresofactivity  7typesoftrip: 1) Homeїwork 2) Workїhome 3) Homeїshopping 4) Shoppingїhome 5) HomeїotherdesƟnaƟons 6) Otherdestinationsїhome 7) HomeтoriginordesƟnaƟon Î Foreachofthesetypesoftrip,separateestimationsaremadeonthebasisofanappropriate methodology.  Travelbehaviourofapassenger:functionofhisdestination. x HomeͲbasedworktripsїmadeonaregularanddailybasis,usuallyduringthemorning and/oreveningrushͲhour. ~tripsbetweenhomeandschool x Shoppingtripsїnotregular,otherexplanatoryfactors(locationoflargeshoppingcentres, changingpurchasingpatterns) Forsocialandrecreationaltrips,adifferentapproachisrequired. Thepredictionmethod=functionofthetypeoftripstudied x Fixedratiobetweennumberoftripsandexplanatoryvariable o E.g.homeͲbasedworktrips:fixedratiobetweennumberoftripsontheonehand andthesizeofthepopulationandtheemploymentrateontheotherhand. o Sumofincomingtraffic=sumofoutgoingtraffic,ifnot:correction(inthisexample theywillusuallycorrectthecolumntotalsasdemographicevolutioniseasierto predictthanemploymenttrends). Î CanonlybeusedforhomeͲbasedworktraffic x Othertypesoftrips:othermethodsofforecasting o Regressionanalysisorcategoryanalysis        

Regressionanalysis=rowtotalsareestimatedusingthisequation:  Î Thecoefficientsa,b1,b2,…,bnareestimatedonthebasisofobservations.Theyrepresent theeffectofthepopulationsize,thecarfleet,income,…onthetotalnumberoftripsleaving thezone. Î Calculatedtotalsforeachrowandcolumnarebalancedbyacorrectioncoefficient.  Categoryanalysis: Î Divideshouseholdsintoanumberofcategoriesonthebasisofsuchcharacteristicsas householdincome,carownership,thenumberofemployedindividuals. Thetripsareassignedtoeachcategoryonthebasisofobservationsinthebaseyear. Î Themethodisessentiallybasedontheassumptionthathouseholdswithequal characteristicsproduceanequalnumberoftrips. Î Predictionofthenumberoftripsbymultiplyingtheaveragenumberoftripsbythenumber ofhouseholdsandbysummatingoverthedifferentcategories. Î ZoneͲbasedapproach:zonalcharacteristicswillbeemployedasvariables. 

2.2.2 Tripgenerationinfreighttransport

 FreighttrafficgenerationїdeterminedbytherelaƟonshipbetweentransportacƟvityand economicactivity. Î Onetriestoidentifyanindirectrelationbetweenthevolumeandthestructureoffreight transport,andthelevelandthestructureofeconomicactivities. Demandfortransportisderived:transportisonlynecessarywhengoodsareproducedand consumedindifferentlocations. Desiredmodeloutputforfreight: x Arepresentationofthetotalincomingandoutgoingtrafficforanumberofzones x Abreakdownoftheseresultsoveranumberofgoodscategories Î Tripgenerationinacertainzonewilldependuponthenatureandlevelofeconomicactivity inthatzone(supplyofgoods) Î Trafficattractionwilldependuponthesamefactorsandmorespecificfinaldemandsfactors (demandforcommodities)   

Sameapproachasinpassengertransport: x E.g.onecanexplaintherowtotalsonthebasisofemploymentorthevalueaddedinthe zone,andthecolumntotalsonthebasisofoverallspending. Youobtainbetterresultsifyouderivetherowandcolumntotalsdirectlyfromproductionand consumptionfiguresforthegoodsconcerned.Eg:rowtotal=proportionaltotheproductionofa good,whereasthecolumntotal=proportionaltotheconsumption(bybothhouseholdsandfirms)of thatgood.Sumrowtotals=sumcolumntotals! 2.3 Tripdistribution  Determinationoftheseparatetrafficflowsfromzonetozone.AlltransportͲattractingzonesare competingwitheachotherfortripscomingfromzonei(tripͲgeneratingzone). 

2.3.1 Distributionofpassengertraffic

 Distribution:concernstheestimationoftransportvolumesmovingbetweenallzonesiandj, wherebyirepresentsthetripͲgeneratingzoneandjrepresentsthetripͲattractingzone.  Î Assumption:changeispredictedinoverallemploymentandthesizeoftheworking population,butwithzonalvariation(newrowandcolumntotalsRiandKj). Î Howlargearethenewseparateflowsxij?  Determinetripdistributionїvariousmethods: x Thegrowthfactormethodandsyntheticapproach  THEGROWTHFACTORMETHOD x Growthfactorsareappliedtotheexistingdistributionpatternasrepresentedinthetrip matrix. x Numberofvariationsdependingonthegrowthfactors o Detroitfactormethod x Newtrafficflowsaredeterminedby:  o Alltrafficflowsofrowiaremultipliedbyagrowthfactorri o Alltrafficflowsofcolumnjaremultipliedbyagrowthfactorkj o Alltrafficflowsaredividedbythegeneralgrowthfactorr. x Factorsri,kj,andraredeterminedinsuchawaythatthenewtrafficflowsadduptothe givenrowandcolumntotals.

x Howaregrowthfactorsdetermined?  x Calculationofflows:      Criticalremarks: x Noaccountistakenofchangingtransportcosts x Themethodcannotbeappliedifoldtrafficflowsareunknown x Nonewzonescanbeincorporatedandnozonecanbesubdivided x Unreliableifzoneissmallandrapidlyexpanding x Forecastingoffuturetrafficflowsdoesnottakeaccountofchangesintraveldemand broughtaboutbynetworkchanges.  THESYNTHETICMETHOD ~AnanalogueofNewton’slawofgravitationalattraction: Î Theforceofattractionbetween2zones(iandj)isassumedtobeproportionaltothemassof zoneiandthemassofzonej,andtobeinverselyproportionaltothedistancesquared. Mathematical:  Î OiandDj:measuresofthegenerativeandattractivecharacteristicsoftheoriginand destinationlocalitiesїdividedinto2categories: Î Proxyvariables:aroughmeasuresuchaspopulationsize Î Exactvariables:inthecaseoftrafficbetweenthehomeandtheworkplace;the workingpopulationandthenumberofjobs.  Gravitymodelcanalsobestatedmoregenerally:  Î Thegeneralfunctionalformf(Cij)remainstobespecifiedempiricallyanddoesnotneedto adopttheform1/Cßij.  Oi=RiandDj=Kj Probabilitythatatripcorrespondstorowi=Ri/X Probabilitythatatripcorrespondstocolumnj=Kj/X Probabilitythatatripfallsontheconnectionwithinzonesi–j=(Ri/X)–(Kj/X)

 Î Thisspecificationisbasedonastatisticalprediction. Î Assumingthatthetransportcostdoesnotchangeandtrafficflowsonlychangethrough changesintherowandcolumntotals,theabovevariantalsoallowsonetointerpretthe Detroitgrowthfactormodel.  Anothervariantofthepoolmodelemployscorrectioncoefficientsdeterminedinsuchawaythat thecalculatedtrafficflowsadduptothegivenrowandcolumntotals.  Î !StrongresemblancewithDetroitmodel,includingtheiterations!!  Anotherformulation:thenumberoftripsbetweenzonesiandjisnotonlyaffectedbythecoston therelationshipconcerned,alsobythecostoftravellingfromitoanotherdestination(v).  Î Typicalexampleofamultiplegravitymodel.  

2.3.2 Distributioninfreighttransport

 Allmethodsapplyingtothedistributionofpassengertrafficmaybeappliedinthiscasetoo. CostͲminimizingdistributionmethods:methodsthatarespecificallydesignedforfreighttransport. Î Thetrafficflowsaredeterminedinsuchawaythattheyadduptotherowandcolumntotals and,underthisrestriction,resultinthelowestpossibletransportcosts.  

Î Cij=transportcostspertonneoffreighttransportedfromzoneitozonej Xij=tonnagetransportedfromitoj Î Representsalinearprogrammingproblem,withalinearobjectivefunctionandlinear restrictions. 2.4 Modalsplit  Theestablishmentoftheshareofeachmodeinthetrafficflows.Intheshortterm,itcanresultinan efficientuseofexistingcapacity.Inthelongterm,therewillbeimplicationsforanyreplacementor expansioninvestmentsinthetransportsystem. 

2.4.1 Themodalsplitinpassengertraffic

Thequestionarisesoftravellers’choicebetweenvariousmodesoftransportation. Amodalchoicemodelisconcernedwiththebehaviouroftravellerswithregardtotheselectionof transportmodes.  Themodalchoiceoftravellersisdeterminedby3explanatoryfactors: 1) Thesocioeconomicstatusofthetraveller x Carownership:peopleowningacarwilltendtouseitunderallcircumstances x Income:nonͲcarownersonahighincomewillusetaxismoreoftenandthoseona lowincomewouldrathertravelbytramorbybus.(‘whitecollarͲbluecollar’) x Age:peopleundertheageof18andabovetheageof60makelessfrequentuseof thecar. x Householdcomposition 2) Thenatureofthetrip x Lengthofthetrip:longdistancesїnegativeimpactoncarͲuseandpositiveimpact onthemodalshareofrailandairtravel x Motivationfortravelling:carisusedlessfrequentlyfortravellingbetweenthehome andworkorschoolthanitisforshopping. 3) Thecharacteristicsofalternativemodes x Differenceintraveltime:thegreaterthedifference,themorelikelythatatraveller willoptforthequickestmode. Totaltraveltimeconsistsofthreecomponents:inͲvehicletime,walkingtimeand waitingtime(lattertwo=excesstime). x Differenceincost:modalchoicebetweenthecarandpublictransportisinfluenced byoutͲofͲpocketsexpenses(=coststhatyoupayimmediatelyorthecoststhatyou regardasmoreorlessproportionaltothedistancecovered) 

2.4.2 Themodalsplitinfreighttransport

=goodsflowpertransportmodeundervariousmarketconditions.  Thefactorsthatdeterminethemodalsplitinfreighttransportmaybedividedintothreecategories: 1) Aspectsregardingthedistributor(goods) 1) Thecategoryofthegoods 2) Railtransportandinlandnavigationareimportantmodesfortransportationofgoods witharelativelylowvalueperunitofweight.Roadtransportdominatesintheother categories. 3) Batchsize,time,frequency,ownershipofvehicles,networkconnections 

2) Characteristicsofthetrip 1) Distance 2) Averagedistancecoveredpertonneisthehighestinrailtraffic 3) Characteristicsofthetransportsupply 1) Priceandreliabilityofthecompetingmodes 2) Riskofdamageandloss 3) Competitiveposition=sumtotalofallelementsdeterminingthemodalchoice.  2.5 Trafficconversion  Itgivesaninsightintotheequivalentnumberoftripspermode. Trafficconversionmodelsїallowsyoutoconverttransportflowsintoloadedtrips. Thisposes2problems: 1) Itdoesnotsufficetocalculatethenumberoftripspermodeoneachgeographical relationship. 2) Oneneedstodeterminethenumberofemptytrips(partofthetotalnumberoftrips). Î Trafficconversioninvolves2operations: Î conversionoftrafficflowsintermsoftonnesintoloadedtripspercapacitycategory Î thedeterminationofthenumberofemptytripspercapacitycategory 2.6 Assignmenttoinfrastructure  Modalsplitoffersinsightintothetrafficflowspermodefromzonetozone. Trafficconversionoffersinsightintothecorrespondingnumberoftrips. Î Howtoassigntheseflowstoexistinginfrastructure?  Assignmentprocess:twophases x Determinationofthealternativeroutes x Assignmentofthemovementstoroutes  2methodstoassigntraffictoavailableinfrastructure: 1) AllͲorͲnothingmethodinvolveschoosingonesingleroutefortheentiretrafficflow.Maybe combinedwithfeedback. x E.g.theshortestorcheapestroute 2) Diversioncurvemethod:shareofvariousroutesisinfluencedinagradual,continuous mannerbydifferencesintermsoftime,distance,cost,etc. 

Î Functionoftraveltimeanddistancesavedcomparedtoanalternativeroute. Î Allpointsona60%Ͳcurvearemorefavourablethanthoseona50%Ͳcurve. Î Feedbackcanbeusedtocalculatethetrafficdensityandensuingspeed,ifneeded:reassign untilastableequilibriumisreached.  Slide24–36??

3. ThemicroeconomicapproachtotransportǦchoicebehaviour

 Unitsofobservationandanalysis:individualsorhouseholds(ratherthanzones). Î Takesaccountofwhoactuallymakesthetransportdecision.Thereforetheycanrespond moreefficientlytotransportpatterns. Î Modelsbasedonindividualchoice,eg:discretechoicemodels Î Modelsbasedonutilitymaximisationofeachindividual  Importantdataproblem: x MostobservedcharacteristicsofthedecisionͲmaker(carownership,income,etc.)are available,whileotherdata(socialstatus,health,etc.)isunknown. x Mostcharacteristicsofthealternatives(traveltimes,costs,etc.)willbeknown,whileothers (reliability,degreeofcomfort)maybeunknown.  Basicmodel(utilitymodel):  

Assumptionconcerningthedistributionoftheerrorterm(Œ): x Iftheerrorsaredistributedinaccordancewiththeextremevaluedistribution,thenone arrivesatthemultinomiallogitmodel. x Iftheerrorsaredistributednormally,onearrivesatamultinomialprobitmodel.  Themultinomiallogitmodel: Allowseasycomputationandinterpretation x Choiceprobability:  Î Inourexample:   x Howtoestimatetheß’s? o MaximumLikelihoodEstimator:estimatorthatcalculatestheparametersforwhich theobservedchoicesismostlikelytohaveoccurred. o Alsocalled:LogͲlikelihoodestimationaslogͲlikelihoodismaximized     Othermodels:  BestͲknowngeneralisationofamultinomiallogitmodel:      

Mixedmultinomiallogitmodel: JointͲchoicemodels(discreteͲcontinuousmodels): Adiscretechoice(destination)iscombinedwithanadditionaldiscreteorcontinuouschoice(the quantityshipped).  Therehavebeenmanyadvancesinmodeltypesduringthelastyearsduetotheincreasingpowerof computers. Probit:inthepastmoredifficulttocalculatebutnowtherearenoproblemsanymore.  Datacollection Revealedpreferencedata: x Datafromobservedchoicesinthemarket x Advantage:realchoices x Somedisadvantages: o Sometimesnotallpossiblealternativesareknown o Hypotheticalchoicescannotbetested o Howpeople“perceive”characteristicsofchoicecannotbeincluded o Datacollection(alotofobservationsareneeded;oftenonlyonechoiceperpersonis registered)  Statedpreferencedata: x Datafrominterviews/experiments x Advantages: o Newalternativescanbeincluded o Onepersoncanmakenumerouschoices x Somedisadvantages: o Hypotheticalchoicesituations o Choicesandcharacteristicsofalternativeshavetobedefinedinadvance      

4. TheactivityǦbasedapproach

 x Analysisoftransportbehaviourinthecontextofconsecutiveactivitiesofanindividualduring acertainperiodatvaryinglocations o E.g.studyofdailytransportactivities x Emphasisonunderlyingderivednatureoftransport x Morerealisticbutalsomorecomplex x NeedtounderstandtherelationshipbetweenexogenoussocioͲdemographics&activity travelenvironmentcharacteristicsontheonehandandrevealedactivityͲtravelpatternon theother. x Problem:datarequirement o E.g.insightsintotravelandactivitypattern  Newgenerationofregionaltraveldemandmodelsischaracterisedby3features: 1) ActivityͲbasedapproach:travelderivedfromdailyactivitiesandpatternsbytheindividuals 2) TourͲbasedstructureoftravel 3) MicroͲsimulationmodellingtechniques:convertactivityandtravelͲrelatedchoicesintoa seriesofdiscretedecisions

5. Anempiricalapplication:freighttransportinEurope

 Anoverviewofthemostsignificantempiricalresultsofaneconometricmodelofdemandforfreight transportinEurope:  Î Purpose:toputforwardapossiblemethodandtoshowhowempiricalresultscanbe interpretedeconomicallyandusedformakingtransportprognoses.



           

11.Transportsupply

1. Introduction

 Supply=f(productprice,pricesofalternativegoods,productionfactorprices,technology,etc.) Twomethodsofcostanalysis: Ͳ Statisticalmethod:usestimeͲseriesdataasabasisfordefiningafunctionthatcorresponds maximallytoreality. Ͳ Engineeringmethod:developmentofanalyticalmodelsonthebasisofproductionfunctions thataredissectedintosuccessiveoperationssothatwecanuseaccountingdatatocalculate aunitcostperoperation. Thechoicedependsonthedataavailable: Ifthecausalrelationshipisclearandit’spossibletoconductexperimentsÆEngineeringmethod IfthedatabaseconsistsofhistoricalobservationsÆStatisticalmethod 

2. Output,inputs,heterogeneityandcalculation

2.1. Theoutputunitintransport  2measurementsofoutput: x Inpassengertransport: o Numberofpassengers o PassengerͲkilometres x Infreighttransport: o Tonnage o NumberoftonneͲkilometres ThereisownͲaccounttransportwhichisfreighttransportforpersonaluse.Eg:abigcompanythat providesitsowntransportforproducedgoodsÙProfessionaltransport=transportcompanies.  Sometimestheyaggregatetheoutputindicators.Howeverthisonlyworksforhomogenousunitsand twomovementsareneveridenticalsotheaggregationisuseless.Forexample,twoshipments carriedoutbythesamemode,onthesameoriginͲdestinationrelationmaydifferfromoneanother becausetheyoccurredatdifferenttimesduringtheday,soweatherconditionsmaybedifferent. Thereforethemodesplitisveryimportant.  

Outputpervehicle:It’sdecreasing.Howcanweincreasethetonpercar?Pricingmeasuresarethe mostefficientandhavealmostnonegativeimpact.Ifyouwantmore,youwillpaymore.        LinkwiththeGDP(graph) Timeline:Strongrelationbetweentheeconomyandtransport.Freetimeistheleastaffectedbythe crisisbecausethepeoplestillgoonholidays,whereasbusinessmenmaytravellessduringthecrisis. Howeverthereisnotalwaysastrongcorrelationbetweeneconomyandtransport.   Valueadded:Theevolutionofvalueaddedoftransportindifferentdomains.Itcontainsallthe activitiesthatareincludedintheprocessoftransportation(logistic,packaging,etc.). 

2.2Inputsintheproductionoftransport Nooutput,withoutinput  2inputs:labourandcapital 1. Labour;numberofstaffandnumberofhoursworked.Thephysicalunitsoflabourthatone aggregatesmustbeashomogenousaspossible.Forexample,asimplemeasurethatisbased onthenumberofemployeesdoesnottakeintoaccountthenumberofhoursworkedorthe qualityoftheworkperformed.  2. Capital;numberofvehicles,infrastructure(differsfromonemodeoftransporttoanother; inland navigation and road transport do not own their infrastructure, whereas railway and pipelinetransportdo),leasingandbuying. Î Thefactorcapitalgivesusmeasurementproblemsataggregatelevel:thecapitalservice providedisimportant,notcapitalstock!Capitalservicesarehardtomeasurebecause theyareonlypartlyhired,mostitemsarepurchased.Thereforetheytakecapitalstockas aproxyvariable,sincechangesinthelevelofstockwillmostlyreflectchangesinthe levelofservicesemployed. 2.3Theheterogeneityoftransportationsupply  Theheterogeneityisreflectedinthe: Ͳ Numberofavailablemodes(transportationtechniques) Ͳ Varioustypesoftransportwithinasinglemode Ͳ Companiesthatsupplytransportvehicles 

Heterogeneity is related to the organisation of the transport market, which varies from mode to

mode,thecapitalthatisrequiredandthedifferentsubmarkets.Variousfactorsofheterogeneity: x Transportcosts=costoftheactualtransport+additionalcostssuchasloading,packaging, insurance,etc.ÆPrincipleofminimisationofthecosts. x Goodspackage:Transportrequirementsaredifferent,eg:sandandgravel(lowvalue)willbe transportedinbulkwhereasotherproductssuchasfoodandflowershavetobeshippedfast sotheyrequireroadandairtransportation.  Generalqualityrequirementscrucialtothesupplystructure:sizeofthevehicle,speed,accessibility, variabilityincapacity,flexibilityandspecialcharacteristicsregardingpackagingandriskofdamage. Eachmodeoffersadifferentcombinationofthesequalityrequirementsandcompetesintermsof qualityandprice.Consequently,thesupplywithinasinglemethodwillbecomemuchmore specialised.  Heterogeneityisalsoevidentintheorganisationandstructureofthesupplyside: Ͳ Irregulartransportservices:anoperatorkeepsafleetofvehiclesinreservesothatitcould bedeployedwhenthereisdemand.Thereisnooperatingscheduleasordersareobtained onanirregularbasis,eg:privatehauliers. Ͳ Regulartransportservices:theykeeptheirfleetofvehiclesonthemoveaccordingtoafixed schedule.Ordersareacceptediftheycanbefittedintothisschedule,eg:publictransport. 

 Also: Ͳ Globalisationoftheproductionprocess(longerdistances) Ͳ Growingcompetitionininternationaltrade(impactonvalueadded) Ͳ Logisticchains:increasingcomplexity Ͳ Interplayofmanyactors Î Areanissuefortheheterogeneityofthesupply    Supportingactivities=logisticactivities=veryimportant!  “Thebigpartscansometimesnotbechanged,sothemodestpartsarealsoimportant,especiallyfor changes.” E.g.staffofanairportisaveryimportantfactor ÆTheoverallperformanceisdeterminedbytheweaklinkofthechain.  Trends: Ͳ Hubconcentration:increasingvesselsize(hub=aswitch/partinachain)eg:anincreasein capacityfrom4.000to15.000containersleadstobiggerports,betterinfrastructure,etc. Ͳ Dedicated terminals (special terminals) = a personal terminal for ships, to load and loss

faster. Ͳ Stressonportproductivity Ͳ Governmentbudgetrestrictions=lotsofinvestmentsareneededbutthereisnotenough moneysoprivateoperatorsareneeded. Ͳ Privatisation=duetobudgetrestrictionsofthegovernment. 2.4Costallocationinjointproductionprocesses.  Whichcostsofthecombinedproductionprocessneedtobeallocatedtoseparateproducts?The differentiationconcernstimeandplace.  Temporalandspatialheterogeneity=economicheterogeneity:impliesthattheelasticityof substitutionbetweentechnicallyhomogeneoustransportservicessometimesapproximatestozero.