Measuring Shippers’ Value of Delay on the Freight System

Quarterly Reports Other Documents Final Report
September 2011
December 2011
Research Brief Final Report

Primary Investigator

Teresa Adams
University of Wisconsin-Madison
271 Computer Aided Engineering
1410 Engineering Drive
Madison, WI 53706

Abstract

The project focuses on developing a model for estimating the value of delay (VOD) for highway freight shippers. The research explores the issues important to shippers when evaluating value of delay. A small number of case studies of representative shippers will be conducted and issues associated with surveying shippers will be identified through a pilot survey. The research involves a survey of shippers and Logit modeling of collected data. Participating shippers are classified into groups to ensure reliable estimate of shipper’s value of delay and also to minimize the sampling size.

Objectives

To date, freight planning decisions are made in the absence of defensible cost/benefit analyses. While the cost of improvements can be confidently estimated, the benefits of investment are much more difficult to identify. In terms of operational benefits to users, there are clearly benefits to freight carriers from infrastructure investment or operational changes, but also benefits to freight shippers and receivers. With current methods, the benefits to carriers are estimated, but the benefits to shippers and receivers are not. Although many recognize this limitation, methods to capture shipper and receiver benefits have not been developed. This research will identify a method and means for estimating the cost of delay or benefit from reduced delay, to shippers and receivers, dramatically improving the state of freight planning, and freight planning decisions.

This research will be conducted through collaboration between researchers from two University Transportation Centers. This project will build upon and continue ongoing research that identifies value of delay (VOD) to freight carriers.

Tasks

  1. Review of literature on value of delay, shipper issues, and freight planning practices involving shippers.
  2. Conduct a select number of case studies to identify shipper involvement issues in this study, their practical issues with freight delay, and their empirical valuation of highway delay cost.
  3. Develop models fors hipper’s value of freight delay on the freight system. Discussion of difference between stated value of delay and the ‘true’ value of delay to shipper operations.
  4. Develop a pilot survey to shippers, and identify survey issues.
  5. Apply the developed model to the survey data and identify shipper’s valueof delay based on the select number of shippers, identify issues such as data deficiency.
  6. Final report.

Project Information

  • Duration: 12 months
  • Dates: August 1, 2010 – July 31, 2011
  • Budget: CFIRE: $80,040; Total: $155,073
  • Student Involvement: Two graduate students
  • Modal Orientation: Highway
  • Project ID: CFIRE 04-14
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