Estimating freight costs over a multi-modal network: an auto industry supply chain example
Moore, Amy Marie
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The objective of this research is to implement multi-modal cost calculations on a freight transportation network, in order to estimate the cost of freight shipments from parts suppliers to original equipment manufacturers (OEMs), and from OEMs to final consumers involved in the automobile manufacturing industry supply chain. The research will describe gaps in the current freight cost estimation literature, determine the strengths and weaknesses of current practices, and offer possible improvement strategies. The necessary components for this research include: a multi-modal (highway-rail-water-air) network database, the geocoded locations and activity levels of auto industry parts suppliers and OEMs; freight movement cost functions; information on the modes and vehicle/vessel types used for the shipment of certain commodity types; and distance- based travel costs per-mile for these modes. A product of this line of research will be a method that other industries, in other locations, might also use to determine overall freight transportation costs throughout an entire supply chain. The present research effort provides an example using data gathered on the automobile manufacturing industry centered in Georgia and Alabama. The network-based freight costs derived in this research should also be useful in other applications, including the estimation of origin-to-destination flows, as well as in the estimation of transportation costs used in regional and statewide freight planning models.