Assessing the socially optimal capacity at a selection of Norwegian car ferry crossings

Abstract

Car ferry services constitute an important part of the transportation network in several parts of the world, especially in areas with limited alternative modes of transport. A central problem facing decision makers is the socially optimal capacity of ferry services. However, the literature has not examined all the decision variables the are relevant to decision makers in a simultaneous framework, only partially. We add to the literature by treating all the relevant decisions variables in a simultaneous framework, which enables a more complete representation of optimal capacity, than partial frameworks. Our proposed methodology also includes the cost of not being able to board the first arriving departure, which is an essential cost in the case of car ferries with too low capacity. We apply the methodology to a case study of three major ferry crossings in Norway. Results indicate that a too large capacity is provided. Thus, local policy makers should consider revising the current service levels. Other policy makers may enact better decisions based on the findings we provide. Sensitivity test suggests that the method used to estimate the number of users not being able to board due to capacity concerns may be improved. This, however, does not alter our main conclusion.