Long- and Short-Run Effects of Fuel Prices on Freight Transportation Volumes in Shanghai

Gaolu Zou,K W Chau

doi:10.3390/su11185017

Abstract

Freight transportation modes consume enormous amounts of energy. This paper estimates the long- and short-run effects of fuel prices on freight volumes in various modes of transportation in Shanghai. Data included monthly changes during the period 2009–2016. Air cargo series were suggested to include one or two unit roots, and hence were removed from the cointegration analysis. Both the Phillips–Ouliaris and Johansen tests did not detect long-run relationships between real fuel prices, water cargo, road, and rail freight. Conventional first-differenced VAR (vector autoregressive) models were estimated. Overall, whether in the short- or long-run, real fuel prices did not influence freight transportation volumes. However, we found a Granger causality running from rail to road freight, as in the short-run (one month), a 1% change in rail freight would lead to a reduction of 0.07% in road freight. Therefore, simply by increasing fuel prices, the government could seldom encourage the shift from energy-inefficient modes of freight transportation to energy-efficient ones to achieve a sustainable freight transport. The allocation of more time and routes for rail freight traffic and the reduction in rail freight taxes may increase the rail freight volume and hence decrease the overall energy use. Our findings, to some degree, contribute to freight transportation economics. Future research may examine the impact of gasoline prices or diesel prices on freight traffic volumes.

Highlights

In 2006 and 2017, 726.2 million and 972.6 million tons were transported in Shanghai, respectively [1]
During the period 2000–2016, the mileage of road transportation in Shanghai increased by 122.6%, while road freight and passenger transportation increased by 37.7% and 37.1%, respectively
As defined in this research, could rarely influence freight volumes, we suggest that the government could use appropriate policies to increase rail freight transportation, while decreasing road freight

Summary

Introduction

In 2006 and 2017, 726.2 million and 972.6 million tons were transported in Shanghai, respectively [1]. Of the 972.6 million tons of total freight traffic volume in 2017, waterway accounted for 58.2%, 6.7 percentage points higher than in 2006, and air accounted for 0.43%, 0.08 percentage points higher than in 2006. During the period 2006–2017, waterway transportation increased significantly, and air grew slightly, whereas both road and rail had a dramatic reduction. In 2017, Shanghai consumed 118.6 million TCE (tons of coal equivalent) of energy, with industrial and residential consumption accounting for 48.2% and 11.6%, respectively. The transportation, warehousing, post, and telecommunications sector accounted for 21.7% [2]. During the period 2010–2016, the freight traffic volume in Shanghai grew by 9.46%; diesel consumption in the transportation, warehousing, post, and telecommunications sector grew by 28%. In terms of diesel use, freight transportation in Shanghai seems to be energy-inefficient

Methods

Findings

Discussion

Conclusion