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

Journal article
Authors Matts Andersson
Moa Berglund
Jonas Flodén
Christer Persson
Jonas Waidringer
Published in Research in Transportation Economics
Volume 66
Issue December
Pages 59-69
ISSN 0739-8859
Publication year 2017
Published at Department of Business Administration, Industrial and Financial Management & Logistics
Pages 59-69
Language en
Links https://doi.org/10.1016/j.retrec.20...
Keywords Logistics; Freight; Transport; CBA; Value of transport time variability; Delay; Risk; Model
Subject categories Transport Systems and Logistics, Business Administration

Abstract

The freight transport system is subject to delays and disturbances, which influence investment and planning decisions made by governments and infrastructure authorities. Traditionally relying on Cost Benefit Analysis (CBA) they are dependent on correct and up-to-date input data. So far, little success has been reached in estimating the effects of disturbances for freight. 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 estimate the value of transport time variability (VTTV). In order to validate the model and its usability it was successfully tested in a case study for a large Swedish retail company. The effects of delays can be divided into four main types: System Killers, Catastrophic Events, Expected Risks, and Contingencies, of which the last two are relevant for VTTV. The model applies these in a two-step cost function with a fixed and variable part, building on previous studies of VTVV for passenger transport based on the scheduling utility approach. A main theoretical result is that the estimation of VTTV is derived mathematically independently of which measure that is chosen for the quantification of TTV.

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