UNDERSTANDING THE VALUE OF RELIABILITY FOR THE FREIGHT INDUSTRY

FTAC MeetingAugust 12th, 2015

Xia JinLCTR, FIU

Outline

Background Purpose Objectives Challenges Stated Preference Survey

Recruitment Experiment Design

Background

Growing demand for

freight transportation

Better understanding

of freight behavior

Increasing role of reliability

in freight transportation

Purpose

Value of Reliability (VOR) refers to the monetary value users place on reliability, or how much the users are willing to pay to reduce the variability of travel time.

It is a critical parameter in benefit-cost analysis, and transportation planning to measure the monetary equivalency of improvements in reliability.

This study aims to understand how the freight community value travel time reliability in their transportation decisions.

Benefits to the Community

Support investment decisions that reflect the needs of freight stakeholders better understanding of how the users (shippers and

carriers) respond to changes in reliability tools to evaluate alternative freight management and

operational strategies.

Project Objectives

Review existing studies on VOR and identify knowledge and data gap;

Conduct stated preference survey to understand user decision-making;

Develop models to estimate VOR by stratification, such as, commodity type, trip length, and business type, etc.

Incorporate VOR in freight analysis and project evaluation.

Stated Preference (SP) Survey

SP surveys are designed to collect preference information from the users through hypothetical scenarios.

Recruitment Stage Background information One recent shipment information

SP Scenarios Eight to nine scenarios, each consists of 2 or 3

alternatives

Proposed Market Segment - Shippers

Light Medium Heavy

Yes X X X X X X

Delivery Window Pressure

X X

Truck

Non

-pe

rish

able No X X X X

Yes X X X X X XPeri

shab

le No X X X X X X

Shippers

RailWaterways

Air

Proposed Market Segment - Carriers

Carriers Truck Rail

Water-ways Air Shipping

Distance Light Medium Heavy Shipping Distance

Con

tain

eriz

ed

<50 Miles X X X <300 Miles X

X X

50-300 Miles X X X

300+ Miles X X X 300-

1000 Miles

X

Non

-C

onta

iner

ized

<50 Miles X X X 50-300 Miles X X X

> 1000 Miles X 300+

Miles X X X

Experimental Design

C1 –within-mode trade-offs among travel time, cost and reliability;

C2 –within-mode trade-offs among travel time, cost, reliability, and departure time;

C3 –cross-mode trade-offs between roadway and railway shipment based on travel time, cost, travel time reliability, service flexibility and probability of shipment damage.

C4 –cross-mode trade-offs between roadway and railway based on travel time, cost, travel time reliability, departure time, service flexibility and probability of shipment damage.

DesignFlow

Recruitment Instrument –Shipment Information

Recruitment Instrument –Background Information

Experiment Design

Alternative 1

Alternative 2

Alternative 3

Mean Transit Time : 10 hrs Mean Transit Time: 15 hrs Mean Transit Time: 12.5 hrs

The shipment has an equal chance of arriving at any of

the following time :

4.5 hours early 2 hours early

On time 5 hours late

10 hours late ( Hints : very high reliability)

The shipment has an equal chance of arriving at any of

the following time :

6 hour early 3 hour early

On-time 4.5 hours late

9 hour late ( Hints : low reliability)

The shipment has an equal chance of arriving at any of

the following time :

3.5 hour early On-time On-time

3 hour late 3 hour late

( Hints : medium reliability )

Cost : $875 Cost : $250 Cost : $400

I prefer this option

I prefer this option

I prefer this option

C1

Alternative 1

Alternative 2

Alternative 3

Departure time : Morning : Before 6:00 AM or

after 10:00 AM, Or Afternoon : Before 3:00 PM

or after 7:00 PM

Departure time : Between 6:00 AM and 10:00 AM

(morning) or Between 3:00 Pm and 7:00 PM (noon)

Departure time : Morning : Before 6:00 AM or

after 10:00 AM, Or Afternoon : : Before 3:00 PM

or after 7:00 PM

Mean Transit Time : 8 hrs Mean Transit Time: 12.5 hrs Mean Transit Time: 10 hrs

The shipment has an equal chance of arriving at any of

the following time :

1 hour early 1 hour early

On time On time

1 hour late ( Hints : high reliability)

The shipment has an equal chance of arriving at any of

the following time :

6 hour early 4 hour early

On-time 5.5 hours late 12.5 hour late

( Hints : very low reliability)

The shipment has an equal chance of arriving at any of

the following time :

0.5 hour early On-time On-time On-time

1 hour late ( Hints : medium reliability )

Cost : $500 Cost : $400 Cost : $750

I prefer this option

I prefer this option

I prefer this option

C2

Road

Rail

Mean Transit Time : 10 hrs Mean Transit Time: 20 hrs

The shipment has an equal chance of arriving at any of the following time :

3 hour early On time On time

2 hour late 2 hour late

( Hints : high reliability)

The shipment has an equal chance of arriving at any of the following time :

3 hour early 3 hour early

On-time On-time

2 hour late ( Hints : medium reliability )

Cost : $500 Cost : $280

Service Flexibility : Medium Service Flexibility : High

Probability of Shipment Damage : Medium Probability of Shipment Damage : Low

I prefer this option

I prefer this option

C3

C4Road

Rail

Road

Departure time : Between 6:00 AM and 10:00 AM

(morning) or Between 3:00 Pm and 7:00 PM (noon)

Departure time : Morning : Before 6:00 AM or

after 10:00 AM, Or Afternoon : Before 3:00 PM

or after 7:00 PM

Departure time : Morning : Before 6:00 AM or

after 10:00 AM, Or Afternoon : Before 3:00 PM

or after 7:00 PM

Mean Transit Time : 12.5 hrs Mean Transit Time: 15 hrs Mean Transit Time: 8 hrs

The shipment has an equal chance of arriving at any of

the following time : 3.5 hour early

On time On time 3 hours late

3 hours late ( Hints : high reliability)

The shipment has an equal chance of arriving at any of

the following time : 1 hour early

On-time On-time On-time

2 hours late ( Hints : very low reliability)

The shipment has an equal chance of arriving at any of

the following time : 1 hour early 1 hour early

On-time On-time

1 hour late ( Hints : Medium reliability )

Cost : $500 Cost : $625 Cost : $750

Service flexibility : Medium Service flexibility : Medium Service flexibility : Low

Probability of Shipment damage : Medium Probability of Shipment

damage : Medium Probability of Shipment damage : Medium

I prefer this option

I prefer this option

I prefer this option