Transport costs, distance, and time: evidence from the Japanese Census of Logistics

Kiyoyasu Tanaka

No 241, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: Geographic distance is a standard proxy for transport costs under the simple assumption that freight fees increase monotonically over space. Using the Japanese Census of Logistics, this paper examines the extent to which transport distance and time affect freight costs across shipping modes, commodity groups, and prefecture pairs. The results show substantial heterogeneity in transport costs and time across shipping modes. Consistent with an iceberg formulation of transport costs, distance has a significantly positive effect on freight costs by air transportation. However, I find the puzzling results that business enterprises are likely to pay more for short-distance shipments by truck, ship, and railroad transportation. As a plausible explanation, I discuss aggregation bias arising from freight-specific premiums for timely, frequent, and small-batch shipments.

Keywords: Japan; Transportation; Costs; Transport cost; Transport time; Distance; Logistics; Selection bias (search for similar items in EconPapers)
JEL-codes: R30 R40 R41 (search for similar items in EconPapers)
Date: 2010-06-01
New Economics Papers: this item is included in nep-ure
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 241. 2010-06-01

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