Freight Costs Research Articles

Return freight strategies and selling formats in e-commerce supply chain: The perspective of consumer fairness concerns and online shopping returns

Returns and consumer fairness concerns put a huge pressure on manufacturers who sell their products online. The optimal selling format and return freight strategy become particularly important for manufacturers in an e-commerce supply chain. Therefore, we build game models for the following scenarios under different selling formats: the seller bearing the return freight costs or the return-freight insurance premiums, consumers buying insurance for themselves, and no one buying insurance. By comparing the optimal solutions of the game models under reselling and agency formats, several conclusions are derived. In the agency format, if the return-freight insurance premium is higher than a particular threshold, then the optimal strategy of the manufacturer is to decrease the selling price to encourage consumers to purchase the insurance, otherwise, the manufacturer should purchase the insurance. As the level of consumer fairness concerns and platform commission rates increase, the manufacturer should gradually move from the agency to reselling format. In the reselling format, if the return-freight insurance premium is lower than a particular threshold, then consumers will purchase insurance and this will make the platform more profitable, and conversely, the platform should bear the return freight costs.

Lead-Time-Constrained Middle-Mile Consolidation Network Design with Fixed Origins and Destinations

Many large e-commerce retailers move sufficient freight volumes to operate private middle-mile consolidation networks for order fulfillment, transporting customer shipments from stocking locations to last-mile delivery partners in consolidated loads to reduce freight costs. We study a middle-mile network design optimization problem with fixed origins and destinations to build load consolidation plans that minimize cost and satisfy customer shipment lead-time constraints. We propose models that extend traditional flat network service network design problems to capture waiting delays between load dispatches and ensure that shipment lead-time requirements are satisfied with a desired probability. We approximate these chance constraints using hyperparameterized linear constraints, resulting in new mixed-integer programs (MIPs) for service network design. To find high-quality solutions to the proposed MIPs, we develop an effective integer-programming-based local search (IPBLS) heuristic that iteratively improves a solution by optimizing over a smartly selected subset of commodities. For the largest problem instances, we propose a two-phase IPBLS heuristic that first utilizes a simplified, restricted MIP that constrains leg waiting delays individually. Computational experiments using data from a large U.S.-based e-commerce partner demonstrate the significant impact of tight lead-time constraints on the structure of the consolidation network designs and their concomitant operating costs. Notably, tighter constraints lead to solutions with increased shipment consolidation and higher dispatch frequencies on selected key transportation lanes. Such solutions trade off higher shipment transit times with significantly reduced shipment waiting times to meet lead-time constraints at lower cost.

Criterion for Ensuring the Effectiveness of the Management of the Global Maritime Industry

Introduction. The significant dynamic nature of modern geopolitical and military threats sets new requirements for evaluating the criteria effectiveness of solving maritime industry management problems, requires new methodological approaches and mathematical models for evaluating criteria, and determines a new architecture of information systems in the structure of which these approaches and models are implemented. This makes the issue of the analysis of the application of criteria and the development, research, and implementation of such models and systems extremely relevant.
 Aim and tasks. The purpose of the study is to create a methodological approach to evaluating the criteria that characterize the effectiveness of the management of the maritime industry, with the dynamic change of criteria due to the influence of threats and challenges.
 Results. A methodological approach has been developed to evaluate the criteria that characterize the effectiveness of the management of the maritime industry based on the model for assessing the convergence of the absolute values of the first derivatives of the criteria over time, which, at short time intervals, can be considered as criteria change trends. It has been established that instead of reducing transportation costs, management switches to the principle of ensuring optimal costs, which leads to an increase in the cost of freight and shock reactions in the sea transportation market. It was established that it is advisable to use the LSCI criterion as an indicator of the negative effect of “local optimization”. After determining the development trends of the criteria, their evaluation as well as the assessment of their convergence were carried out, which became the basis for proposing directions for improving the efficiency of maritime industry management.
 Conclusions. The developed methodological approach and the mathematical model of its implementation make it possible to conduct both quantitative and qualitative analyses of the effectiveness of management of the maritime industry. To increase the efficiency of management, it is proposed: to integrate port community systems; to increase the stability of the port infrastructure so that it can function in crisis conditions; to achieve coordination of management actions at all levels; to avoid “local optimization” and introduce integral optimization; to respond not only to direct threats but also to detect the cascading effects of threats.

Creation of new logistics for the export of arctic mineral resources as a condition for their sustainable development

An overview of possible transformations of logistic schemes for the export of mineral raw materials mined in the Arctic zone of the Russian Federation is presented. The existing system of transportation of mineral raw materials by sea, rail, inland water, road and air transport is considered. The description of mineral resource centers forming the cargo base of the Arctic transport system is given; their typification by types of transport for the export of products is given. A change in logistics schemes in connection with access to new markets in the changed geopolitical conditions was considered. The need for changes does not apply to rail, inland water, road and aviation transport, which provide mainly domestic transportation. Major changes affect pipeline and maritime transport. It was concluded that it is necessary to create liquefied natural gas production facilities at the exit points to the coast of the poorly devoured seas of main gas pipelines in order to monetize pipeline gas and expand the throughput capacity of main oil pipelines suitable for port oil loading terminals of the Baltic and Black Seas. The conditions for delivery to Asian oil export markets by sea have deteriorated due to the increase in the duration of circular flights and the cost of tanker freight. In addition, the possibility of an increase in the cargo traffic of the oil export to the Asian market in the Northern Sea Route was questioned due to the lack of a high deadweight cargo fleet and the required Arctic ice classes. The proposal on the need to revise strategic planning documents adopted in other political and economic conditions based on the current realities is justified.

Participatory systems science for enhancing health and wellbeing in the Indian Ocean territories.

Co-creation of diabetes and obesity prevention with remote communities allows local contextual factors to be included in the design, delivery, and evaluation of disease prevention efforts. The Indian Ocean Territories (IOT) comprise the Christmas (CI) and Cocos Keeling Islands (CKI) and are remote Australian external territories located northwest of the mainland. We present results of a co-design process conducted with residents of IOT using realist inquiry and system mapping. Interviews with 33 community members (17 CI, 14 CKI, 2 off Islands) on causes and outcomes of diabetes (2020/21) comprising community representatives, health services staff, dietitians, school principals and government administrators. Interviews were used to create causal loop diagrams representing the causes of diabetes in the IOT. These diagrams were used in a participatory process to identify existing actions to address diabetes, identify areas where more effort would be valuable in preventing diabetes, and to described and prioritize actions based on feasibility and likely impact. Interviews identified 31 separate variables categorized into four themes (structural, food, knowledge, physical activity). Using causa loop diagrams, community members developed 32 intervention ideas that included strengthening healthy behaviors like physical activity, improving access to healthy and culturally appropriate foods, and overcoming the significant cost and availability limitations imposed by remoteness and freight costs. Interventions included relatively unique Island issues (e.g., freight costs, limited delivery timing), barriers to healthy food (e.g., limited fresh food availability), physical activity (e.g., transient workforce) and knowledge (e.g., multiple cultural backgrounds and language barriers, intergenerational knowledge).

Lignocellulosic biofuels use in the international shipping: The case of soybean trade from Brazil and the U.S. to China

The International Maritime Organization (IMO) committed to reduce by 50% the annual greenhouse gas (GHG) emissions from international shipping by 2050 compared to 2008 levels. Future low-carbon fuels use in the maritime transport to curb GHG emissions can increase freight rates and affect trade, especially for commodities transported over long distances. This study performed a case study to evaluate lignocellulosic marine biofuels use in soybean trade routes from Brazil and U.S. to China, in terms of supply volumes, GHG emissions and potential increase on freight costs. This is the first attempt to assess biofuel use in a specific product trade. To this end, two scenarios and three technologies were developed for biofuels availability from 2020 to 2050. Findings reveal that Brazil benefits from higher biofuel supply and four Brazilian biofuel pathways meet total bunker fuel demand in 2050, while U.S. pathways supplied up to 24%. However, emission reduction come at significant cost increase with abatement costs reaching more than US$ 300/tCO2e for some of the Brazilian and U.S. pathways. To reduce this cost gap, market instruments, such as carbon price of at least US$ 100/tCO2e would be required. Nevertheless, fuel cost increase has not resulted in significant cost variation between Brazilian and U.S. vessel routes. Hence, Brazilian trade routes could keep lower freight costs than U.S. even with higher biofuel shares. This indicates that regions capable of supplying low-carbon fuels can become more competitive in their exports in a decarbonized maritime trade.

An application of land use, transport, and economy interaction model

Governments need to assess the benefits of transport projects to prioritize investments. It is imperative for governments to have tools that can closely estimate the actual benefits and impacts of investments in significant transport projects.Traditionally, the benefits of a transport project have been estimated by using a transport model, assuming fixed land use for the base and project case in the future. However, this approach cannot measure the impact of land-use changes as residents and businesses relocate to take advantage of lower travel and/or freight costs resulting from the project. Consequently, the benefits of the project may be under or overestimated, depending on its position within the transport network and how it reshapes land use patterns in the future. To overcome this drawback in existing models, this paper firstly presents a literature review of advances in the land use transport interaction model (LUTI), then discusses the development of a LUTI model for Victoria, Australia (VLUTI) by integrating the Victorian Integrated Transport Model with a Spatial Computable General Equilibrium model (SCGE). The land use component (SCGE) was developed to represent a highly resolved zone system, detailed classifications of occupations and industries, and spatial interactions via commuting, and trade in goods and services, and thus enables VLUTI to simulate a detailed and nuanced picture of land use and transport interactions in a complete economic environment.The literature review also indicates limited research in applying a LUTI to estimate land use change benefits. This paper presents an application of VLUTI by looking at differences in the conventional transport benefits under both static and dynamic land use scenarios. In the static method, the land use in the project case is unchanged from the base case. In the dynamic case, the land use in the project case, at a future point in time, is endogenously adjusted within VLUTI. It presents a method to correct, in the dynamic case, the benefits as estimated by the rule of a half, which usually assumes static land use. The paper concludes with suggestions for further developments and improvements of VLUTI such as incorporating an activity-based transport model and an environmental model to progress toward an integrated land-use, transport, economy, and environment model capable of assessing the full impact of a transport project in a holistic way.

Illicit capital movement through trade misinvoicing in Burundi: a disaggregated approach

PurposeThis study aims to examine the illicit capital movement through trade misinvoicing in Burundi, at disaggregated levels by major trading partners and by major export and import commodities.Design/methodology/approachTrade misinvoicing is estimated by comparing the trade values declared by Burundi with those declared by trading partners in a bilateral international transaction, after adjusting for the cost of freight and insurance. Disaggregated trade misinvoicing by major trading partners is computed using the Direction of Trade Statistics database of the International Monetary Fund over the period 1970–2019. Disaggregated trade misinvoicing by major trading commodities is computed using the UN-COMTRADE database over the period 1993–2019.FindingsExports of Burundi to most of its major trading partners are found to be underinvoiced. The top destinations for export underinvoicing are United Arab Emirates, Belgium and Germany. However, exports to UK and Switzerland are found to be overinvoiced. The major export commodities considered, coffee and gold, are found to be affected by trade misinvoicing to a great extent. On the import side, the estimation results indicate that imports of Burundi from its major trading partners are in general overinvoiced. High import overinvoicing is observed in the trade with Saudi Arabia, China and Japan. At commodity level, for the top 6 commodities considered, imports were to a great extent found to be overinvoiced. Cases of illicit capital outflows and inflows through trade misinvoicing are highlighted.Practical implicationsSome policy implications are drawn from this study. First, in collaboration with its development partners, the Government of Burundi should put in place measures to reduce the trade misinvoicing phenomenon, which undermines poverty reduction efforts. The study has shown which trade partners are involved and which commodities are mostly affected. Policy efforts could then be focused in that regard. Investigations at the company and transaction levels can be made to identify the mechanisms of trade misinvoicing. Second, more effort is needed in ensuring systematic and transparent reporting of international trade transactions. To fight trade misinvoicing, transparency in international trade is key, through coordinated enforcement of reporting rules.Originality/valuePrevious studies analyzed the problem of trade misinvoicing at an aggregated level. However, this leaves out essential information on trading partners involved in the phenomenon as well as trading commodities affected. This study investigates trade misinvoicing at disaggregated levels, at product level and by trading partner.

Connected Vehicles and Digital Infrastructures: A Framework for Assessing the Port Efficiency

In logistics and freight distribution, scheduling and cost efficiency are two crucial issues for transportation companies that look with favour at the innovation introduced by Intelligent Transportation Systems (ITS). Moreover, an infrastructure level of service, safety and environmental defence are important for planners and public administrations. In this sense, terminal capacity and landside operations at the maritime infrastructure represent an interesting task for the community. Thus, this paper contributes to the research by: (i) proposing a generic framework for the integration of autonomous and connected vehicles with physical infrastructures; (ii) evaluating the opportunity to manage traffic arrivals according to vehicles’ priority and testing the effects of the introduction of a buffer zone outside the maritime port; (iii) improving efficiency and security within the terminal area by reducing waiting time and avoiding interference between flows. Moreover, the proposal for a discrete-event simulation model to assess terminal capacity in a ro-ro terminal is presented. Therefore, the paper contributes to some critical aspects towards sustainable development. First, regarding policy measures and actions, it proposes a valuable tool to assess what-if scenarios. Secondly, it represents a step forward in the process of smart corridor design for freight vehicles; in fact, it proposes a tool for managing landside operations at maritime ports and focuses on intervention in solving specific barriers and bottlenecks for freight who cross a ro-ro terminal daily. Furthermore, it offers a viable solution for managing connected vehicles in a context where full automation still needs to be achieved. The results evidenced the framework’s capability to deal with the traffic demand, thus improving the efficiency of the terminal landside operations.

Emissions and Total Cost of Ownership for Diesel and Battery Electric Freight Pickup and Delivery Trucks in New Zealand: Implications for Transition

Road freight transport contributes to a large portion of greenhouse gas (GHG) emissions. Transitioning diesel to battery electric (BE) trucks is an attractive sustainability solution. To evaluate the BE transition in New Zealand (NZ), this study analysed the life-cycle GHG emissions and total cost of ownership (TCO) of diesel and BE trucks based on real industry data. The freight pickup and delivery (PUD) operations were simulated by a discrete-event simulation (DES) model. Spreadsheet models were constructed for life-cycle assessment (LCA) and TCO for a truck operational lifetime of 10 years (first owner), this being the typical usage of a tier-one freight company in New Zealand (NZ). The whole-of-life emissions from the diesel and BE trucks are 717,641 kg and 62,466 kg CO2e, respectively. For the use phase (first owner), the emissions are 686,754 kg and 8714 kg CO2e, respectively; i.e., the BE is 1.27% of the diesel truck. The TCO results are 528,124 NZ dollars (NZD) and 529,573 NZD (as of 2022), respectively. The battery price and road user charge are the most sensitive variables for the BE truck. BE truck transitions are explored for freight companies, customers, and the government. For the purchase of BE trucks, the break-even point is about 9.5 years, and straight-line depreciation increases freight costs by 8.3%. Government subsidy options are evaluated. The cost of emission credits on the emissions trading scheme (ETS) is not expected to drive the transition. An integrated model is created for DES freight logistics, LCA emissions, and TCO costs supported by real industry data. This allows a close examination of the transition economics.

Studi Pemilihan Moda Angkutan Barang Kapal Kayu dan Kapal Fery Rute Kota Tarakan-Kabupaten Tana Tidung

Tana Tidung Regency as a new autonomous region in North Kalimantan in 2007 resulted in increased interactions between regions in support of the supply of food, and other social needs. Tarakan City is an essential region supporting the Tana Tidung Regency. Currently, public the primary transportation from the Tarakan-Tana Tidung is served by two modes of transportation; Ferry Boats and Wooden Boats. Researchers conducted a study to identify the trends and variables that affect the choice of Tarakan-Tana Tidung freight routes to enhance the performance of primary public transportation. Study used variable freight costs per coli, travel time, the timetable for departure, service convenience, and travel time to the Port of Tengkayu 1 or Juata Ferry Port adapted from the study of transportation mode selection by travelling persons. The survey, in the form of a questionnaire to 170 respondents, used the stated preference method and was conducted with multiple regression analysis to obtain the quantitative relationship between a collection of research variables and respondents to obtain utility and probability by modelling the binomial logit. The research results showed that the discrepancy between the Ferry Boats and Wooden Boats was in balance, with 65% of the patrons choosing the Wooden Boat to support the freight activities. All research variables have been influential in the choice of goods transport mode in the most dominant order, namely goods transportation cost per coli variables, travel time, the timetable for departure, service convenience, and travel time to port.

The health impact of freight transport-related air pollution on vulnerable population groups

Every year, over 364,200 people in Europe die prematurely due to the effects of air pollution, in which the transportation sector plays an important role. In Brussels, freight transport generates €61,604 of air pollution health costs daily. Research has shown that dynamic spatiotemporal modeling of both emission sources and exposed people (using mobile phone data) renders more accurate impact results when analyzed in microenvironments. However, mobile data underrepresent population segments that are more sensitive to the effects of air pollution, such as toddlers, children and elderly individuals. This paper examined the link between vulnerable people aged 0–3, 3–18 and >65 years and freight transport-related air pollution concentrations in the Brussels-Capital Region (BCR). To this end, dynamic tailpipe emissions and their spatiotemporal dispersion were calculated using output from the Transport Agent-Based Model (TRABAM) on a daily basis. Population densities were calculated as a function of the residences’ occupancy rate and school/class size and opening hours. The effects of exposure were then evaluated using age- and sex-differentiated exposure-response functions and monetized using local hospital cost factors. Data were compiled for 2021. A strong overlap between people’s presence at the institutions’ locations was noticed with a peak in (freight) transportation movements in the city. The results showed that €37,000 [€34,517.47–€40,047.13] of freight transport-related air pollution health costs were incurred daily by vulnerable population segments. While these vulnerable groups made up 25.34% of the total BCR population, they incurred 60% [56.03%–65.01%] of the engendered transportation air pollution costs. The results were then geographically analyzed to identify 465 traffic-related air pollution hotspots across the territory, which accounted for €36,000 [€33,677.85–€39,101.31] of total costs. The latter can be used in future studies to assess sector-specific freight transportation policies, which should take into consideration spatiotemporal population densities on the local level.

Chain of Responsibility in Land Transportation Associated with Overloading Activities

Heavy vehicles are one of the modes of land transportation in Indonesia in the activity of transporting goods. A large number of transport companies creates business competition related to the supply of freight costs. To get more profit, transportation companies practice over dimension and overloading. Overloading which is more prevalent in transportation, causes losses for various groups. One of the losses can impact workers in a transportation company where the liability for the crew of the vehicle is not regulated in detail. The existence of the principle of Chain of Responsibility in regulations regarding the transportation of heavy vehicles aims to expand the responsibility for losses incurred, such as overloading practices. This principle ensures that all subjects in the logistics chain have the duty to ensure compliance with regulations, including truck owners, transportation operators, goods senders, and goods recipients. This study discusses the responsibility of the parties in the delivery of goods related to overloading and recognizes the concept of Chain of Responsibility in transportation by land in overloading practices. The research method used is empirical juridical with a conceptual approach and a statute approach. For these problems, this study aims to analyze the accountability of the parties in overloading activities and to recognize the concept of Chain of Responsibility in land transportation in overloading practices.

Impact of globalization of the world market and internationalization of the cargo transportation process on the maritime transport system

In this study, it is substantiated that the process of globalization leads to the world economy acquiring the characteristics of a complex multi-level system, which makes it possible to use the properties of systems as tools for researching the effects of negative factors and threats to the development of the world economy and maritime transport as subsystems of the world economy. It was established that not only the rise in prices on the world's leading stock exchanges Using the systems theory methods but also the freight cost of dry cargo ships is a significant influencing factor on food prices for the whole world. It has also been established that since the cargo traffic of food with a substantial level of processing to countries where, due to the level of development of their economy, there are mostly no opportunities for processing products, this affects the increase in the cargo traffic of container transport in global sea transportation. The synergistic nature of the impact of negative factors on the worldwide economy and the maritime transport industry has been outlined. It is singled out that the synergistic negative effect led to a chain reaction to the change of international sea transport routes. The assessment of the effectiveness of management actions of the industry management on external challenges and threats was carried out. It is pointed out that the direction of the global maritime transport industry needs to dynamically adjust the operation of logistics networks to respond effectively to the growing needs of the world market. It is also indicated that the need for more efficiency and capacity of the port infrastructure still predominantly affects container transportation due to the growing demand for the volume of cargo transportation. It is emphasized that the established definition of the world transport system needs to be sufficiently corrected. The conducted research found that the world transport system, under the influence of the globalization of the world market and the internationalization of the cargo transportation process, acquires transnational features and becomes a global structure, working increasingly in the interests of the world market. Keywords: globalization, internationalization, maritime transport, crises, risks, threats, efficiency of industry management.

No wheat crisis: trade liberalization and transportation innovation in Quebec during the 1830s and 1840s

Abstract In the first half of the nineteenth century, the wheat oriented agrarian economy of Lower Canada saw a rapid collapse in wheat production. These developments have been blamed on factors ranging from soil exhaustion to cultural conservatism and used to infer falling living standards in the colony. We provide evidence suggesting this collapse was largely the result of adjustment to the trade shock that followed the Colonial Trade Act of 1831 and a rapid reduction in freight costs between the Canadian colonies. Areas more exposed to external markets—as proxied by road access—shifted away from wheat production.

Межрегиональные различия в инфляции в свете теории Экли

In Russia inflation, as measured by the consumer price index (CPI), varies greatly from region to region. This study aims to find an answer to the following question: does there exist a long-term, equilibrium relationship between these differences and interregional differences in the cost of production, delivery and sale of domestic goods and the cost of imported goods? This research question stems from the markup theory of inflation proposed by G. Ackley, who assumed that inflation is a markup on the cost of labor and materials and the cost of living imposed, respectively, by firms and workers to protect profits and wages. Our empirical model of regional CPI includes the unit labor cost, the cost of freight and the cost of imported goods (all in index form). Econometrically, the model is an error-correction model derived from the ARDL model. The pooled mean group estimator is used to estimate the model’s parameters for a panel of 80 regions for the years 2000–2020. Our results do not reject the hypothesis of long-run homogeneity. For a given level of inflation, an increase in unit labor costs would cause prices to adjust completely in the long run, leaving the markup unchanged. Although Ackley’s theory calls for controlling the markup with the usual instruments of monetary and fiscal policies, it finds them inadequate and allows to conclude that regional authorities are able to contain price increases through industrial policy.

Break-even distance of rail and road container transport. Case study of Central Europe providers

In transport practice, rail transport is considered an alternative to monomodal road transport over a certain distance, which is called the break-even distance. Freight costs are often a decisive factor in the choice of freight transport mode and are therefore used as a relevant criterion for estimating the break-even distance. In the paper, the authors compare the usability of individual types of transport in intermodal freight transport, with carriers operating in the region of Central Europe, using the break-even distance. The cost principle, by means of which the break-even distances are determined, is analyzed from the point of view of the customer of transport services, i.e. the manufacturing or forwarding company.

Correlates of Transport Mode Choice: Dry Commodity Movement. A Case of Malawi.

Goods from Malawi face a range of challenges in competing on the international market which in part, is as a result of high transportation costs. Despite rail transportation being cheaper than road transportation, Malawi commodity shippers prefer the latter, thus affecting the pricing of the goods on the market. Therefore, the purpose of the study was to investigate the correlates of transport modal choices and the Theory of Planned Behavior (TPB) was used to guide the study. The study employed quantitative approach and descriptive research design in which a questionnaire was used to collect data from a sample of 104 respondents in a population of 141 dry commodity shippers by using simple random probability sampling technique. The key objective of the study was to determine the correlates of transport modal choice in Malawi. The study found that shipment travel time, freight costs, transport mode availability and transport service reliability had a relationship with transport modal choices that shippers made. The study therefore recommends that transport service providers should endeavor take into account these correlates for proper transport planning and management.

Variance in Truck load Carrying Capacity impacting Truck Fill Rate, Freight Cost and Carbon Emissions

Variance in Truck load Carrying Capacity impacting Truck Fill Rate, Freight Cost and Carbon Emissions

Variance in truck load carrying capacity impacting truck fill rate, freight cost and carbon emissions

Variance in truck load carrying capacity impacting truck fill rate, freight cost and carbon emissions