European Regional Science Association ___________________________________________________ August, 2003
4.3 Magnitude of the extra benefits.
Eventually one should discuss the likely magnitude of these benefits. One should
consider three elements :
First the value elicited by shippers for faster transportation may be disappointing
low, compared with the 30 euro per hour and per vehicle that one find for instance in
France based on factor cost method. DeJong Velay et Houée (99) find value around 6 to
8 euro /hour and per shipment. Wigan and al find lower values, from 0,66 AU$/pallet.hr
for Intercapital Full Truck Load (FTL) to 1,30 AU$/pallet.hr for Metropolitan FTL, and
1,40 AU$/delivery.hr Metropolitan Multidrop. Noting however that such results reflect
only short term values of transportation time reduction, one should also consider that
medium and long term adjustments can make the final benefits of trip time reduction
larger than short term value.
Second, it is likely that the shippers valuation of marginal transport time savings
may be decreasing. This relates to a twofold phenomenon : (i) time saving depending
shippers production cost economy are probably decreasing because the most effective
changes in production and logistical process will be made when the first time saving
occur. Discontinuity in transportation time saving depending production cost economy
may alter the regularity of this phenomenon but will probably not change the overall
relation between time savings and cost decrease (ii) time savings in themselves are
limited, and the magnitude of future time savings is decreasing in relation to
accumulated time savings. Transport duration can tend toward 0, but the achievement of
time savings becomes harder when this 0 limit is getting closer. As underlined by
McKinnon (95) it is likely that time the construction of a road network be an unique
event in history, and that the related logistic consolidation effects are also unique in
history.
Third, and most important, value of transport time savings cannot be applied as is
to travel time savings generated by infrastructure improvement. The reason again is that
shippers experience transport time savings that can be quite different from travel time
savings that take place on the road. This relates to the productive conditions of the
hauliers that can make them prefer to internalise part of the travel time savings and not
to transmit all of them to the benefit of the users. To sort out this question one needs to
set up a model where a profit maximising transport operator faces transport time and
travel time depending costs and transport time depending revenues, and to derive from
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