Freight mode choice : air transport versus ocean transport in the 1990's

Abstract

Value density is often considered when considering the choice whether to ship cargo by air or by water. However, although cargo value is directly linked to the overall cost of shipment, it is the deciding factor in mode choice only for those cargoes with either an extremely high or extremely low value per pound. For cargo in some middle range other criteria, such as density of stowage, perishability, reliability of service, or the need for more accurate demand forecasting must be considered. The characteristics of international cargoes shipped by both modes in 1992 are examined and a logistics cost for the distribution of representative goods is calculated. A schedule of premiums is developed, which shows the transportation premium arrange of cargo value densities and stowage densities could support if transit time were reduced from the longer times associated with water transport to the shorter times found in air travel. The volume of mode-converted cargo is projected for the year 2030 and the number of aircraft required to transport the cargo is estimated.