| The influence of lowering transportation costs on intercity freight flows was investigated. The transportation cost is the shipping cost and is related to transportation system attributes.;A model is developed based on classical economic behaviour: profit maximization of producers. Intercity freight flows were calculated for actual transportation costs, and then for new transportation costs lowered by the same percentage in the entire network.;The freight flow data used in the study were taken from USA Census of Transportation, Commodity Transportation Survey. Using freight rate models and freight flow data, the unit transportation cost functions for rail, TL, and LTL as well as modal share functions as functions of distance were developed.;The model was applied to SIC 249 commodity group (wood products) for production zones and markets located in the Eastern USA. As an example, a 20% reduction in transportation cost resulted in 9.8% increase in total quantity moved. |
