On the generalized cost - demand elasticity of intermodal container transport

Abstract

Elasticities for freight transport in the context of mode choice are hardly available for markets in which intermodal container transport competes with truck only transport. These elasticities are expected to be different, however, from values found in the literature for traditional freight transport, as trucking is a complement to rail or inland waterway transport when used for pre- or post-haulage, but a substitute to these modes when used from the origin to the final destination. This paper presents direct and cross (generalized) cost elasticities for road and rail transport demand for continental intermodal container transport and constitutes an attempt to compare the elasticities for intermodal transport with those for general freight transport. We first look into the sensitivity of elasticities to the total length of the haul and to pre- and post-haulage distances by road using a stylized, theoretical model. The assumption about pre- and post-haulage distances in mode choice appears to be important, as elasticities for road transport in the context of intermodal transport chains can be half of the values currently used in a conventional mode choice situation without access or egress by road. Next we provide empirical values for the market of container transport using a European multimodal network model. The absolute values of the estimated elasticities follow a double trend when the cost for trucking is modified: they increase with the distance between the origin and the destination, but decrease with the length of pre- or post-haulage. In all cases, the values are estimated to be inelastic. Overall, the “complement” component of the computed elasticities for rail-road transport is estimated to be approximately 20% of the total impact.