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A method for measuring and valuing transport time variability in logistics and cost benefit analysis

Conference contribution
Authors Matts Andersson
Moa Berglund
Jonas Flodén
Christer Persson
Jonas Waidringer
Published in World Conference on Transport Research, WCTR 2016, Shanghai 10-15 July
Publication year 2016
Published at Department of Business Administration, Industrial and Financial Management & Logistics
Language en
Keywords Logistics, Freight, CBA, Value of Transport Time Variability, Delays
Subject categories Business Administration, Transport Systems and Logistics

Abstract

Today transport system is subject to delays and disturbances, which has impacts on the transport chain itself and on the recipients of the goods. These effects influence the investment and planning decisions made by governments and infrastructure authorities. These authorities traditionally rely on Cost Benefit Analysis (CBA) as an input to their decisions. By performing CBA calculations they can base their decisions on a solid and comparable foundation. However, CBA is dependent on correct and up-to-date input data, but little success has been reached in determining the effects of disturbances. Largely, this is due to the complex and context depend nature of disturbances and thereby obvious difficulties in estimating the effects. This paper aims to contribute to the understanding of disturbances in freight transport by reviewing and classifying the effects occurring due to transport time variability (TTV) and to suggest a calculation model to mathematically estimate the value of transport time variability (VTTV). The calculation method is tested in a case study for a large Swedish retail company. An extensive literature review has been performed on the existing methods to measure TTV and VTTV. Except identifying the measures used in the studies, any discussions in the studies on which measure to use has also been analysed. Effects of delays are further analysed and mapped in an activity framework of Transport, Transhipment, Delivery, Use of goods and Overall chain effects. Based on this mapping, four main types of disturbances are identified based on Magnitude and Frequency, followed by a suggestion on how these disturbances should be managed in a VTTV perspective. A method has also been developed to mathematically estimate VTTV for freight, extending previous studies on VTTV for passenger transport based on the scheduling utility approach and linked to the previous defined framework of four main types of disturbances. The study has resulted in an improved understanding of the effects of disturbances in freight transport networks through the developed framework. Further, a mathematical method for estimating VTTV has been developed. The model contains is a two-step cost function with a fixed and variable part. The method have successfully been tested on a test data set and proven to be able to estimate VTTV. Furthermore, this study has found that the estimation of VTTV can be (and is) derived mathematically independently of which measure that is chosen for the quantification of TTV.

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