On Shipment Size and Freight Tariffs Technical Constraints and Equilibrium Prices

François Combes

Journal of Transport Economics and Policy, 2013, vol. 47, issue 2, 229-243

Abstract: The objective of this paper is to analyse in detail the structure of road freight tariffs. To do so, a market equilibrium model is designed, with a detailed representation of the technology of carriers, and of the logistic decisions of shippers. In particular, shippers send shipments of endogenous sizes, which are consolidated by carriers in vehicles of fixed capacities. The model shows that even at marginal cost pricing, freight rates have a complex structure, which is explained by the simultaneous presence of access costs and of the vehicle capacity constraint, and by the logistic costs of shippers. © 2013 LSE and the University of Bath

Date: 2013
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