Externalities of freight transportation

Another great news! Our paper: “A selected review on the negative externalities of the freight transportation: Modeling and pricing” got accepted in Transportation Research Part E: Logistics and Transportation Review.

Planning of freight transportation activities creates benefits as well as costs. Among those costs, some of them, namely externalities, fall on other people/society that have no direct relevance to the operations of transportation. Such externalities are accrued expenses which should be addressed by actual pricing policies to enable an efficient and sustainable freight transportation system.

This paper reviews externalities in quantitative terms, and then provides pricing studies of these costs per unit of freight transported along with the most recent estimations. The associated negative externalities are structured by transportation mode (road, rail, maritime, and air).

In the last decade, the body of knowledge on the reduction of externalities from freight transportation has grown notably, where most of the studies are case or context specific. This paper aims to provide a state-of-the-art review of the models and the pricing studies for externalities incurred by transportation and logistics covering different transportation modes. The scientific contribution of this study is three-fold: (i) to review negative externalities that have been addressed in the freight transportation literature; (ii) to present and compare a proper mathematical modelling of each externalities, where possible; and (iii) to review the scientific literature on the internalization of the externalities.

negextwIn particular, an overall picture of pertinent transportation externalities in quantitative terms along with pricing studies regarding the associated costs is presented for different transportation modes. Five important conclusions are made:

  1. For both modeling and pricing of the negative externalities, the majority of the studies are done in the domain of road transportation.
  2. Among the externalities, air pollution and Green House Gasses are the most discussed negative externalities.
  3. The definitions of externalities tend to be limited in emissions, noise, congestion, accidents, water pollution and land use. However, there are other externalities such as the effects due to the production of vehicles and transport infrastructure. These include: energy production, vehicle production, maintenance and disposal, infrastructure construction.
  4.  A top-down approach seems more common than bottom-up estimations in the practice of internalizing negative externalities; this is due to the complexity of measuring individual entities in the transportation networks.
  5. The challenges for studying freight externalities and their imparts as well as comparisons of them across different transportation modes include availability of reliable and consistent data (e.g., lack of real-time data), differences in units of measurement (e.g., km/h vs mph), global versus regional nature of some mode of transportation (e.g., aviation and shipping), and limited responses to the technological advances (e.g, electric vehicles).

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