Productivity growth in urban freight transport: An index number approach

Abstract

Improvement of operational efficiency is a common goal of most governmental freight transport policies. Productivity and efficiency analysis consequently provides a sound knowledge base. This paper illustrates how axiomatic production theory can be applied to model road freight transport, and proposes a logistics efficiency measure as the function representation. Based thereon, a logistics productivity index that decomposes into technical, cargo mix, vehicle capacity, and efficiency changes is established to determine the rate and drivers of growth. Emphasizing urban logistics, the paper discusses the limited access to reliable data at the micro level and illustrates how local or regional freight transport can be evaluated applying pseudo panel techniques to national freight surveys. Correspondingly, the theoretical productivity index is implemented on a pseudo panel covering the 24 largest cities in Norway between 2008 and 2012, when 12 of them entered a collaboration agreement to promote efficient transport. The results indicate a modest 0.6% average productivity growth. Efficiency change is the key driver of growth, countered by technical stagnation and regress. Negative productivity growth is expected if this trend continues. Moreover, the results do not reveal productivity gains from urban agglomeration or membership of the collaboration agreement, suggesting that prevailing transport and land use policies have so far been unable to foster productivity growth in urban freight transport.