Freight Transport Industry Research Articles

Valuation effects of mergers and acquisitions in freight transportation

This study investigates valuation effects of mergers and acquisitions in the freight transportation industry. It is found that mergers and acquisitions create synergistic gains, especially tender offers, consistent with the view that freight transportation mergers and acquisitions occur for synergistic reasons rather than management’s desire for empire building or perk consumption. Both target’s and bidder’s shareholders are better-off, but most of the synergistic gains accrue to the target’s shareholders. Targets’ valuation effects are greater for vertical rather than horizontal mergers, indicating a positive valuation for firms that control and manage a more extensive supply chain. The bidders’ wealth effects are greater for friendly mergers. Overall, the findings have important implications for professional practice and the development of the theoretical literature.

Scenarios for the Brazilian road freight transport industry

PurposeThis article aims to describe a qualitative, exploratory study with the objective of developing scenarios for the road freight transport industry in Brazil and evaluating the effectiveness of the method applied, which used the stakeholders of said industry as a means to identify the variables of the scenarios.Design/approach/methodologyAccording to the classification scheme developed by Huss and Honton, the authors' method fits into the intuitive logics approach to scenarios, employing concepts of stakeholder analysis as proposed by Freeman. Primary data collection was conducted through key informant interviews, as outlined by Fetterman. The use of the method of intuitive logics combined with the stakeholder analysis evaluates the consistency of experts' opinions on the characteristics of stakeholders. Four environmental scenarios, distinct but equally plausible, were generated for the road freight transport industry as it was felt that more than four scenarios tends to be too complex.FindingsThe method applied produced scenarios distinctive enough to classify them as contrasting, accounting for macroenvironmental variables and variables determined by influential stakeholders in the analyzed industry. Organized and connected, these variables produced precise end states that warrant consideration in the policies and strategies of industry players. The characteristics of the scenarios produced reveal that the method was effective. The authors found the most influential stakeholders in the industry to be the government, shipping clients, end consumers, logistics service providers, and trade associations. The industry's main uncertainties are tied to how the actions of government, shippers, and logistics service providers will unfold.Research limitations/implicationsSome limitations could be identified in the method. One refers to the absence of procedures to govern the chronology of events at the time of preparation of scenario plots. Another shortcoming is the third and final stage of the research; the authors observed some weakness in the method when defining a variable that is independent because it can be independent of the variables selected for the last step but dependent on others considered but not selected.Practical implicationsThe results of the study can stimulate reflection of stakeholders on factors that will affect their decision making, stimulate understanding of the conditions for sustainability of the industry, and identify business opportunities and necessary strategic resources for the success of organizations in the future.Social implicationsThe transport industry plays a vital role in factors that are paramount for the economical development of a country, such as exploration of resources and mass production, and, in Brazil, road freight transport is of particular importance. The research can guide public policy in regulating and investing in industry, since the plots facilitate the understanding of the consequences of causal relationships as well as the final states resulting from these. The scenarios reveal causal relationships strongly influenced by the stakeholder “government”, especially regarding investment in infrastructure, regulation and supervision of the industry.Originality/valueApplication of the method proposed by Boaventura and Fischmann to the road freight transport industry generated distinct, but equally plausible scenarios. The method considered the key uncertainties as dichotomous variables. The scenarios were different since combinations of final states of the key uncertainties led to a different logic or rationale. The authors may state that this particular application contributed towards improvement of the method, as it tested the method's logic when applied to a complex environment influenced by many stakeholders.

Modelling the impacts of ICT adoption for inter‐modal transportation

PurposeThe purpose of this paper is to present a parametric model to assess the impacts of information and communication technology (ICT) applications on company freight transportation processes (i.e. “company” perspective). The aim is to support both internal monitoring procedures and the decision‐making process of ICT adoption, as well as increase managers' awareness of these solutions in improving their business. The model has been applied to inter‐modal terminal processes, which are particularly critical due to the high number of players involved and the need for integrating different modes of transport throughout the whole delivery process.Design/methodology/approachThe present study is part of a broader research on the topic of ICT adoption in the freight transportation industry. Based on the outcome of the previous stages of this research, the impact of ICT applications on inter‐modal processes has been modeled using an activity‐based costing approach. Interviews were conducted with both inter‐modal terminal managers and technology providers to collect the required inputs and validate the model. A case study has been performed to apply the model and a further sensitivity analysis has been carried out.FindingsThe application of the model to the examined inter‐modal terminal showed that the most significant “as is” costs are those connected to handling activities. Three different ICT scenarios have been also explored. Based on the company “as is” scenario, the model provides an assessment of how and when a positive return on investment can be achieved. Results proved that the benefits deriving from ICT adoption are considerable and depend on the level of technology adopted.Originality/valueThe paper addresses an identified need in the literature of quantifying the impact of ICT for freight transportation. It is one of the few attempts to model costs and benefits of ICT for freight transportation, taking into account the major factors involved. Additionally, the model can be a valuable support to practitioners in evaluating their investments, as well as monitoring their company current performance.

Overview of salient economic features of the modes of freight transport for use in the formulation of national transport policy in South Africa

Defining the economic role of the various modes of freight transport should be one of the basic ingredients of both an economically rational transport policy and the effective functioning of the existing free freight transport market in South Africa. In the interest of the national economy and in the commercial interest of freight carriers, national policy on freight transport should take cognisance of (1) why governments involve themselves in transport, (2) the policy instruments of governments that affect the performance of the freight transport sector, and (3) the salient economic features of the freight transport market that should be considered in the formulation of transport policy. The goal of the research was to compile an overview of these three aspects. The research approach and methodology combine (1) a literature survey; (2) an analysis of the cost structures of freight transport modes; and (3) interviews conducted with specialists in the freight transport industry.

Evaluating service quality in the Durban freight transportation industry

This paper evaluates service quality in the Durban freight transportation industry, in which a high degree of competition exists. Previous measurements of service quality in the industry have been casual gauges, rather than a formalised process. This paper makes a contribution by examining the level of service quality, specifically from a tangibles, reliability and responsiveness perspective, thereby identifying service quality gaps which need to be closed, with a view to raising service quality levels in the industry. The SERVQUAL instrument has been used to measure service quality levels administered to 500 of the industry’s active customers, i.e. organisations utilising the services of the freight transportation industry. The targeted respondents were managers responsible for logistics in their organisations. It was found that gaps existed between expectations and perceptions of service quality on 14 of the 15 measured items. Recommendations are made as to how the industry can improve its service quality levels.

A two-stage tabu search algorithm with enhanced packing heuristics for the 3L-CVRP and M3L-CVRP

The Three-Dimensional Loading Capacitated Vehicle Routing Problem (3L-CVRP) addresses practical constraints frequently encountered in the freight transportation industry. In this problem, the task is to serve all customers using a homogeneous fleet of vehicles at minimum traveling cost. The constraints imposed by the three-dimensional shape of the goods, the unloading order, item fragility, and the stability of the loading plan of each vehicle are explicitly considered. We improved two well-known packing heuristics, namely the Deepest-Bottom-Left-Fill heuristic and the Maximum Touching Area heuristic, for the three-dimensional loading sub-problem and provided efficient implementations. Based on these two new heuristics, an effective tabu search algorithm is given to address the overall problem. Computational experiments on publicly available test instances show our new approach outperforms the current best algorithms for 20 out of 27 instances. Our approach is also superior to the existing algorithm on benchmark data for the closely related problem variant M3L-CVRP (which uses a slightly different unloading order constraint compared to 3L-CVRP).

Pricing for freight carriers in a competitive environment: A game theory approach

Article history: Received 2 January 2011 Received in revised form April, 18, 2011 Accepted 20 April 2011 Available online 22 April 2011 In recent years, development of freight transport industry has led to fierce competition among transportation companies and therefore carrier-pricing issue has received more attention by researchers. This paper studies pricing and fleet management decisions for full-truckload freight carriers, which compete on a road network. We propose a game theory approach under two scenarios. In the first, we model the non-cooperative game wherein the carriers announce their prices simultaneously in competition; in the second, we allow the carriers to share their information and announce their prices while participating in cooperation. We show that carriers can reach the highest profit level in the latter scenario; subsequently, a bargaining game is discussed as a scheme to share the extra joint profit. © 2011 Growing Science Ltd. All rights reserved

Derived Demand for Different Modes of Passenger and Freight Transportation in India with Respect to Increasing Energy Price Levels

This paper brings out the price elasticity estimates of different modes of transportation for both passenger and freight (with aggregate data) and freight segments (with disaggregate data) for the Indian Economy with respect to the increasing energy price levels from 1980-1981 to 2006-2007. With aggregate data own-cross price elasticities of air, rail, road, water, other surface transport and inventory levels were estimated. Since rail and road transportation modes are prominent in freight segment, estimations were made for them with disaggregate data. The tracks the transport mode demand shifts that are taking place owing to increasing energy price. Though the railways occupy a dominant role in the passenger segment, in the freight transport industry, road freight is taking over slowly.

An exploratory study of ICT adoption in the Italian freight transportation industry

PurposeCompanies in the freight transportation industry can currently make use of an increasing number of applications based on Information and Communication Technology (ICT) to improve the performance of their processes. Although these applications have become more widely used in recent years, there is still little research focussing on the actual adoption rate. The present study aims to fill this gap and provide a broad empirical analysis of the use of ICT‐based applications in the freight transportation industry in Italy.Design/methodology/approachThe analysis uses multiple‐case studies. It is based on semi‐structured interviews with the management of leading Italian companies involved in transportation processes.FindingsThe study provides an insight into the current adoption of ICT applications among companies involved in freight transportation activities in Italy. The results point out the most used functions in each application area and the level of integration across these application areas.Research limitations/implicationsThe sample of companies examined in this study was selected by expert assessment, and is biased towards companies willing to provide data and share results. However, the findings provide some interesting results on how and where investments in ICT can be suitable for companies in the logistics and transportation industry.Originality/valueThe paper fulfils an identified need for in‐depth case studies focussing on the adoption level and the implementation process of ICT applications in transportation, and it is of interest to researchers and practitioners in the field of logistics and transportation management.

Analysis of the role of maritime freight transport industry in the Korean national economy

The maritime freight transportation industry has played an important role in the Korean economy. The Korean maritime freight transportation industry is faced with a period of transforming it competitively and efficiently in this global age. This paper, therefore, aims to identify the impact of the maritime freight transportation industry in the Korean national economy. Hence, this paper provides policy-makers with accessible and reliable information regarding the role of the Korean maritime freight transportation industry. This study employs input-output (I-O) analysis to examine the role of the maritime freight transportation industry in the national economy for the period 1995-2003, with specific application to Korea. This study pays particular attention to the maritime freight transportation industry by taking the industry as exogenous variable and then investigates its economic impacts. We identify inter-industry linkage effects in 20 sectors, production-inducing effects, added value-inducing effects, and supply-shortage effects of the maritime freight transportation industry.

Analysis of the role of maritime freight transport industry in the Korean national economy

The maritime freight transportation industry has played an important role in the Korean economy. The Korean maritime freight transportation industry is faced with a period of transforming it competitively and efficiently in this global age. This paper, therefore, aims to identify the impact of the maritime freight transportation industry in the Korean national economy. Hence, this paper provides policy-makers with accessible and reliable information regarding the role of the Korean maritime freight transportation industry. This study employs input-output(I-O) analysis to examine the role of the maritime freight transportation industry in the national economy for the period 1995-2003, with specific application to Korea. This study pays particular attention to the maritime freight transportation industry by taking the industry as exogenous variable and then investigates its economic impacts. We identify inter-industry linkage effects in 20 sectors, production-inducing effects, added value-inducing effects, and supply-shortage effects of the maritime freight transportation industry.

Disaggregating Freight Analysis Framework Version 2 Data for Florida

Economic expansion and global trade over the past several decades have driven growth in demand for freight transportation in the United States. However, freight transportation capacity is expanding too slowly to keep up with demand, and freight productivity improvements gained through investment in the Interstate highway system and economic deregulation of the freight transportation industry in the 1980s are showing diminishing returns. In Florida, this problem is especially acute, because the population and employment in the state between 2001 and 2030 are expected to grow dramatically. For Florida to maintain its competitiveness in the face of this growth, a good understanding of freight and its impacts on the transportation network is needed. The Freight Analysis Framework Version 2.2 (FAF2) provides a wealth of information to understand and evaluate the impact of freight on the transportation network. To make FAF2 more applicable to state departments of transportation and metropolitan planning organizations (MPOs), it is necessary to disaggregate the FAF2 regional origin–destination (O-D) database to smaller geographies. Two potential audiences will find a disaggregated FAF2 O-D database useful. The first audience consists of MPO and state department of transportation modelers who want equations for inclusion in travel demand models that would estimate freight, and ultimately truck shipments, on the basis of population and employment. The second audience consists of planners who want the FAF2 tonnage information by detailed commodities at the county level of geography. The existence of the two groups suggests different methods. A methodology that satisfies both audiences was developed.

A proposed regulatory framework for road and rail freight transport in South Africa

The increase in the number of freight vehicles on South Africa’s rural road network has received substantial attention. Insinuations persist that long-distance road freight haulage is of a somewhat unsavoury economic nature, and that strict economic re-regulation of the land freight transport is necessary. During the 1970s road transport replaced rail carriage as the dominant form of long-distance freight transport (excluding minerals and ore) in South Africa. On long hauls road freight carriers transport certain primary products of an organic nature (such as timber, fish and agricultural produce), some semi-finished goods, many finished goods and most consumer goods. Road freight carriers are continuously gaining market share on long-distance links where rail transport is the more cost efficient mode. The greater value added by road freight carriers in comparison with rail transport through service effectiveness is often more than the cost premium paid for utilising their service rather than making use of rail transport. Throughout history, governments have involved themselves in transport. A diverse range of arguments have been advanced for this involvement in transport, including the following:Control of excessive competition, co-ordination of transport, integration of transport with economic policy, maintenance of safety, security, and order, provision of costly infrastructure, provision of public goods, recovery of the true resource cost of transport inputs, regulation of harmful conduct and externalities, restraint of monopoly power, and social support. A set of nine instruments can be identified that governments apply to influence the performance of the freight transport industry: Legislation, direct supply, fiscal measures, monetary measures, moral appeal and persuasion, policies relating to strategic commodities, procurement policy, provision of information, and research and development. The best prospects for a sound development of land freight transport activity in South Africa will be offered within the framework of a free-functioning freight transport market.

Combining vertical and horizontal collaboration for transport optimisation

PurposeThe purpose of this paper is to focuss on customer driven supply chains and what this means for the management of freight transport, a key process in the supply chain as it acts as a physical link between customers and suppliers. It aims to assess whether some of the new collaborative models for transport management are delivering better optimised solutions.Design/methodology/approachThe paper is based on a multi‐dimensional methodological approach, which includes empirical, model building, opinion and archival evidence. Much of the thinking and findings in this paper have been derived from a series of quasi‐delphi discussion sessions with logistics industry experts from three sectors, steel, grocery and construction and experienced academics in the fields of logistics and supply chain management.FindingsThe paper sets out to argue that new innovative solutions are emerging for better transport optimisation, that exploit the competitive power of collaboration, both vertically with supply chain partners and horizontally with other logistics service providers (LSPs).Research limitations/implicationsThe research was largely focused on the road freight transport industry in the UK and Europe. However, it is felt that similar thinking can be deployed in other settings for alternative transport modes and other geographical regions. From an academic perspective the paper contributes to the notion that supply chain management as well as focussing on vertical coordination and process integration also needs to incorporate the potential considerable power of horizontal collaboration.Originality/valueIn particular it is original in that it highlights how important it is to combine vertical collaboration with horizontal collaboration if better optimised transport solutions are to be achieved. This is of considerable value and interest both to practitioner and academic communities.

Warehouse Demand and the Path of Goods Movement

Executive Summary. In 1994, Mueller and Laposa published “The Path of Goods Movement” that identified a new paradigm in the analysis of warehouse space demand and location. The evolution of the freight transportation industry was underway and the transportation logistics business was in its infancy. Over the past fifteen years the “Path of Goods Movement” (POGM) concept has been embraced by the real estate industry and many large real estate investors have based their warehouse acquisition and management strategies on the POGM concept. Even Prologis, the largest industrial REIT in the United States is concentrated in warehouse markets that lay on the POGM. This paper looks at the changes that have occurred to the POGM over the past fifteen years and identifies new trends and relationships that have modified the POGM.

Analyzing the productivity of Korea and China’s road freight transport industry: A nonparametric Malmquist approach

The objectives of this paper are to estimate the annual Malmquist TFP(total factor productivity) index of Korea and China’s road freight transport with DEA(data envelope analysis) and to decompose the index into technical efficiency change and technology change. In the process of the estimation, we used labor, capital, and fuel as input factors and ton-km of road freight transport as output factor. The panel data of Korea and China’s road freight transport industry from 1985 to 2004 are used. The results of the analysis show several points. First, there was no significant improvement in China’s TFP growth before 1997, but there was continuous growth in TFP since 1997 because of constantly increasing domestic freight transport demand. Second, there was downward trend in Korea’s TFP, especially there was a large reduction of productivity in 1998 because of the huge reduction of road freight transport demand during the period of the economic crisis. Third, the technology improvements play a significant role in the TFP growth and the technical efficiency had negative effects on the TFP growth of Korea. However, the technology improvements as well as the technical efficiency had positive effects on the TFP growth of China’s road freight transport industry.

Three-player game-theoretic model over a freight transportation network

With recent development in freight transportation industry, its network structure has become more complicated, as many decision-makers competing for profits with each other are involved. While most recent research in this area is focused on the perfectly competitive market and the prices are given as a constant tariff rate, little attention has been paid to the system optimization problem in the absence of regulatory authority. In this paper, we investigate the competitive equilibrium in an oligopolistic market on a freight network. A partially non-cooperative game among shippers, carriers and infrastructure companies (IC) is examined. All three kinds of players act as profit maximizing agents, except that the carriers and ICs are assumed to behave cooperatively in their own coalitions. We consider the vertically efficient nonlinear tariff schedules which are commonly used in the transportation industry. By introducing a three-stage game-theoretic model, we show that the equilibrium flows can also maximize total system profits if the IC and the carrier both use vertically efficient nonlinear pricing schedules. The division of the surplus associated with each shipment is obtained by solving a linear programming problem. We provide a few examples under different situations to show the existence of the resulting equilibrium.

Assessing the impact of ICT on UK general haulage companies

This paper focuses on the road freight transport industry, using the UK as a case study. It examines the extent to which Internet freight exchanges and the use of information and communication technology (ICT) processes are affecting general haulage. Recent surveys suggest that there is scope within the road transport industry to improve efficiency in terms of fill rates and empty running. Any improvements may also help to alleviate the pressures faced in many developed countries by the haulage industry, which include driver shortages, new legislation, such as the Working Time Directive in Europe, increasing road congestion, as well as to support improvements desired for sustainability. A background summary of the UK road haulage industry and the potential impact of e-commerce are provided before the results of a survey from 49 general haulage operators in their attitude to and adoption of ICT developments are analysed and assessed. The study concludes that a split picture is emerging. While many of the smaller haulage operators remain dependent upon traditional communication and process systems, the larger logistics companies, who control the majority of vehicles and freight movements, are progressively developing new ways of working supported by ICT adoption.

Logistic Costs and Brazilian Regional Development

The objective of this paper is to discuss the role of logistics and transport policy in Brazilian regional development. The role of transport policy as an instrument for regional development is reviewed, focusing on the expansion of both rail network, in the late nineteenth and early twentieth centuries, and the paved trunk road network, mainly after the 1950s. Estimates of the present size and a picture of the recent evolution of the freight transport industry are shown, following a discussion of the major determinants of logistic costs. Evidence of the logistic performance of agricultural, industrial and commercial firms allows tentative conclusion regarding the implications of the physical and commercial linkages between states, as well as network interdependencies. The final section discusses strategies and policies to reduce logistic costs that are effective in terms of contributing to regional development, emphasizing financing and regulatory issues, as well as the development of coherent strategies across political jurisdictions.

Agent-intermediated electronic markets in international freight transportation

In many industries, agent-intermediated markets are inefficient because information about latent demand and supply never gets to market. We demonstrate how information technology (IT) in the form of an agent-intermediated electronic market (EM) alleviates this problem by enhancing the agent-as-market-maker using the international freight transportation industry as an example. We find that an EM increases agent participation and investment thereby increasing demand and supply. Because of tradeoffs between incentives for investment, the EM chooses a profit allocation between agents resulting in limited agent participation. In addition, when price depends on demand and supply balances, price and volume in the market can increase simultaneously.