Improving inland freight logistic efficiencies: Is there any ideal modal spilt?

Abstract

Freight and logistics activities are the pillars of modern-day business activities. This study aims to identify the ideal modal split for freight transportation and improve the freight logistic efficiencies in a developing country (Pakistan). This study contributes to the literature by applying a linear programming approach to freight transportation of an entire developing country and identifies an ideal modal split between railways and trucks. In addition, the study also quantifies the inefficiencies of the railways' sector. The results indicate that Pakistan's freight must be mainly transported by railways (about 97 percent of total freight) and partially by trucks (about 3 percent of total freight) to be cost-efficient. It was also found that Pakistan railways can transport its current freight with 22 percent of its current fuel usage and save about 60 percent of the total time it currently takes to transport its freight. The study is helpful for Pakistani policymakers and researchers interested in linear programming applications in logistics. The study is equally beneficial for policymakers in other developing countries to quantify the inefficiencies in their inland freight transportations and identify the ideal modal split that could help them prioritize the public sector infrastructure investment.