AN ANALYSIS OF CARGO TRANSPORTATION BEHAVIOUR IN KITA KANTO (JAPAN)

Abstract

Users of port services internalize various parameters of port efficiency and location in their cargo shipping decisions. Estimating this demand for ports is essential for any policy decisions related to the strengthening of port infrastructure or questions related to the market entry or exit of ports and related services. This paper develops a model to specify and empirically estimate the underlying factors that influence port selection behavior for containerized cargo transportation in the Kita Kanto region of Japan. Due to confidentiality issues that preclude the identification of shippers, the decision-making unit in this paper is at the level of municipality. Shippers in each municipality make their choice regarding ports, and the outcome at the level of municipality is the aggregation of the choices made by shippers located in that municipality. Shipper decision regarding ports is jointly made with the decision on where they want to van or de-van their cargo. Facilities for vanning or devanning at the port, at the shipper's place or any third location is an important decision variable. A discrete choice model is presented where each municipality faces a choice of six alternatives designed on the basis of vanning-devanning facilities and port combinations and makes its decision on one depending on various port and shipper characteristics. The results indicate that time of travel to the municipality from the port, total vessel capacity, and efficiency of port infrastructure play important roles. Market share elasticity of various ports with respect to key policy variables, such as time of travel, is estimated.