Abstract
Freight rates often differ by the direction of freight transportation. To investigate the determinants of a directional imbalance in freight rates, we show that a deviation between front- and back-haul freight rates depends on both density economies and directional imbalances in transport flows. Using panel data on truck freight transportation in Japan, we find that a 10% increase in the front-haul transport flow relative to back-haul transport flow leads to a 1.3% decrease in the front-haul freight rate relative to back-haul freight rate. This suggests that the negative effect of density economies in front-haul transport flow dominates the positive effects of both density economies in back-haul transport flow and the directional imbalance in transport flows.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
