European Regional Science Association ___________________________________________________ August, 2003
Introduction
It is well known that time savings represent a very large part of the benefits
accounted for in transportation projects' Costs Benefits analysis. This has been widely
recognised in transport economics literature, for instance Ortuzar (94) indicates that
time savings represent the most important benefits for transportation projects. It is usual
to consider that in European countries time savings represent up to 80% of measured
benefits of a project. Among these time savings, freight transportation represents an
important part, although it is harder to find in economic literature formal estimates of
corresponding share. Expert estimates from Banque Européenne d'Investissement,
indicate that in the European Union around one third of time benefits are due to freight
transportation, in other countries this share can reach 50% of time savings benefits. This
implies that an incorrect estimate of freight value of time will provide biased Cost
Benefit Analysis and misleading policy recommendations.
Still one should recognise that freight value of time has been significantly less
investigated than passenger value of time and remains a field for further investigations.
There are many reasons for this situation,. We will not here provide an in depth analysis
of these reasons, but we will only list the main causes of this situation : the separation
between the decider and the object that actually travels (the most visible difference is
that in passenger transportation the traveller can decide himself while in good
transportation it is not the case) ; the difficulty of identifying a single decision maker or
to elicit the decision making process; the multiplicity of economic agents involved in
the transport and the related difficulty to identify the agent that will take advantage of
the time saving ; the instability of the shipment population, when as underlined by
Fridstrom and Madslien (94) the shipment cease to exist as soon as it reaches its
destination ; the intrinsic heterogeneity of shipments, transport operators and shippers,
while it is likely that shipments transport have an higher number of characteristics or
attributes than passenger trips. Last but not least a sound knowledge of freight transport
is impelled by the scarcity of reliable and complete information in a context where
confidentiality often matters.
The point here is that due to these factors, freight value of time still deserves more
investigation. In this article we will focus on one single aspect of freight value of time,
which is the usual practice to take into account only the reduction of transportation