TRANSPORT PRICING AND DISTRIBUTION EFFICIENCY

A BRIEF REVIEW IS PRESENTED OF SOME SALIENT MARKET CHARACTERISTICS IN A FORMULATION FOR DEMAND DERIVATIONS IN ORDER TO IDENTIFY SOURCES OF DISTRIBUTION INEFFICIENCY AND TO ASSESS THE RESULTING IMPLICATIONS FOR TRANSPORT PRICING. AN ATTEMPT IS MADE TO IDENTIFY THE OCCASIONS FOR POSSIBLE DEPARTURES FROM DISTRIBUTRION EFFICIENCY AND TO CONSIDER THE APPROACHES TO TRANSPORT PRICING CALCULATED TO COUNTER THIS ABERRATION. THE SYSTEM USED SHOWS THAT THE MOST EFFICIENT TRANSPORTATION MEDIUM IN A PARTICULAR SITUATION IS THE ONE WHICH OPTIMIZES THE SYSTEM AS A WHOLE BY ACHIEVING THE LOWEST OVERALL TOTAL DISTRIBUTION COSTS. THESE CONSIDERTIONS PROVIDE A UNIQUE MEANS TO QUANTIFY THE QUALITY ATTRIBUTES OF ALTERNATE MOVEMENT SYSTEMS IN A GIVEN DISTRIBUTION COMPLEX. THE KEY IS FOUND ON THE EFFECT WHICH ALTERNATIVE TRANSPORTATION SERVICES OF AN EQUAL QUALITY HAVE ON TOTAL DISTRIBUTION SYSTEM COSTS. THESE OUTLAYS WHICH ARE INFLUENCED BY MODAL SELECTIONS MAY BE DUBBED-NON-TRANSPORT COSTS AND ARE IDENTIFIED WITH THE NOTATION NTC. FOR BOTH ANALYTICAL REQUIREMENTS AND MEASUREMENT FEASIBILITY IT IS MORE EFFICIENT TO WORK WITH NTC DIFFERENTIALS BETWEEN ALTERNATIVE MODES. THE COMPOSITION IS ACCEPTED THAT INTER-MODAL DIFFERENTIAL IN NTC MEASURES VARY AMONG SHIPPERS OR BLOCKS OF TRAFFIC IN A GIVEN MARKET. SOME POTENTIALLY SIGNIFICANT GENERALIZATIONS ARE SUGGESTED BY THE FOLLOWING ABSTRACT RELATIONSHIPS (1) WITH FIXED PRICE AND MARGINAL COST RELATIONS IN THE FACE OF VARYING NTC DIFFERENTIALS, PROTECTING EFFICIENCY IN TERMS OF INTER-MODAL TRAFFIC ALLOCATIONS AND MINIMUM OVERALL DISTRIBUTION COSTS IS MORE COMPLICATED THAN COMMONLY RECOGNIZED, (2) EMPIRICAL RESEARCH IN KEY ASPECTS OF TRANSPORT MARKET STRUCTURE IS NEEDED TO DETERMINE THE REAL WORLD SIGNIFICANCE OF THE THEORETICALLY POSSIBLE EFFICIENCY ABERRATIONS, (3) A FEW GENERAL OBSERVATIONS ARE MADE ABOUT PRICING POLICY THAT FURTHER RESEARCH MAY VALIDATE, AND (4)RATIONAL SHIPPING PURCHASER DECISIONS ARE AS SIGNIFICANT FOR EFFICIENCY AS CARRIER PRICING. THE PROPER ROLE OF REGULATION SEEMS TO DEPEND ON THE EFFIEIENCY REFINEMENTS THAT ARE DESIRED AND ON THE EMPIRICAL SIGNIFICANCE OF THE EFFICIENCY ABERRATIONS THAT WOULD BE ASSOCIATED WITH MARKET-ORIENTED RATES.

  • Availability:
  • Supplemental Notes:
    • Vol 46, No 2, PP 181-190, 3 FIG, 4 TAB
  • Authors:
    • Roberts, M J
  • Publication Date: 1970-5

Media Info

  • Serial:
    • Land Economics
    • Publisher: University of Wisconsin Press
    • ISSN: 0023-7639

Subject/Index Terms

Filing Info

  • Accession Number: 00201890
  • Record Type: Publication
  • Source Agency: Federal Highway Administration
  • Files: TRIS, USDOT
  • Created Date: Aug 17 1970 12:00AM