Understanding the Value of Travel Time Reliability for Freight Transportation to Support Freight Planning and Decision-Making

Kollol Shams, Florida International University


Today's logistics practices are moving from inventory-based push supply chains to replenishment-based pull supply chains, leading to a lower and less centralized inventory, smaller shipment sizes, and more just-in-time deliveries. As a result, industries are now demanding greater reliability in freight transportation. Delays and uncertainty in freight transportation translate directly into additional inventory, higher manufacturing costs, less economic competitiveness for businesses, and higher costs of goods that are being passed on to the consumers. Given the growing demand in freight transportation, the emerging needs to better understand freight behavior for better policy and investment decisions, and the increasing role of reliability in freight transportation, this research aims at providing a) better understanding of how the freight system users value travel time reliability in their transportation decisions, and b) advanced methods in quantifying the user's willingness to pay for the improvement of transportation related attributes, particularly travel time reliability. To understand how the freight industry values travel time reliability in their transportation decisions, and particularly the presence of user heterogeneity, this research designed and conducted a stated preference (SP) survey for freight users in road transportation. Based on the feedback received during the pilot stage, reliability was measured as the standard deviation of travel time and presented as a frequency of on-time and late delivery in the choice scenarios. The survey collected 1,226 responses from 159 firms in Florida between January and May 2016 via online and paper methods. Various modeling approaches were explored to estimate the willingness to pay (WTP) measures among freight users, including multinomial logit (MNL) and mixed logit model. Market segmentation and interaction modeling techniques were employed to investigate preference variations among user groups, commodity groups, product type, and various other shipment characteristics, including shipping distance and weight. In general, across all groups in the sample, values of $37.00 per shipment-hour ($1.53 per ton-hour) for travel time savings and $55.00 per shipment-hour ($3.81 per ton-hour) for improvements of reliability were found in this research. Furthermore, while investigating the effects of shipping characteristics on the user's preference in WTP, the results suggested that shipping distance and weight were the two most important variables. The results of the study help advance the understanding of the impact of the performance of transportation systems on freight transportation, which will lead to policy and investment decisions that better serve the needs of the freight community.

Subject Area

Civil engineering|Transportation

Recommended Citation

Shams, Kollol, "Understanding the Value of Travel Time Reliability for Freight Transportation to Support Freight Planning and Decision-Making" (2016). ProQuest ETD Collection for FIU. AAI10743892.