Benefits of travel time savings for freight transportation : beyond the costs

European Regional Science Association ___________________________________________________ August, 2003

and that the usage sometimes has it to label delivery time the duration between loading
and unloading of the good. But for convenience purpose we propose to use the above
defined nomenclature.

Based on this definition we can now present what is the current practice in Cost
Benefit evaluation.

2. Current practice in freight time saving valuation.

2.1 Cost based valuation.

A brief survey of current practices in European countries and in international
organisations shows that freight time savings valuation relies on factor cost. This is
clearly illustrated by Cost Benefit Analysis methods in use in France (Ministère de
l'équipement (98))or in England. In the latest, COBA Manual indicates two components
: changes in Vehicle Operating Costs, and changes in Vehicle Occupants' value of time.
These two components of Value of time can be affected in two ways, although in most
of the projects the two effects will be combined : (i) by an increase in speed for a fixed
distance, (ii) by a decrease in distance for fixed speed. This latest effect is reflected in
COBA analysis by a decrease in km cost. The figure hereafter represents the aspect of
total factor costs (vehicle operating costs and vehicle occupants costs) for different
speed, when distance is fixed and when speed and time are changed. More details can
be found in DETR (96).

Figure 1 : factor cost value of time based on D.E.T.R. methodology (fixed
distance).

Speed

speed

Cost

Travel time

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