A geometry of uncertainty : cost and time in intermodal freight competition.

Freight mode choice relies on many factors including cost, time and quality of service. To take these parameters into account, the economist builds a value of time, he translates in money the service quality level, and then he calculates a generalised cost which is used in his models. This method is commonly used in macro-economic models to dispatch traffic between transport modes, in micro-economic models to explain modal choice. But this method is not always a good tool to explain how a company makes its choice, because time or service quality are not easy parameters to evaluate. Then what kind of models can be used in such a situation? The example of time was used in the comparison of intermodal rail-road transport with all-road transport. It is shown that time is not only a cost in such a comparison. Two ways to integrate time in the profitability comparison between these two modes, using the spatial theory to build their market areas were, compared. The first method is inspired by observations inside trucking companies. It shows how the intermodal market area evolves with the required time to deliver goods to the customers (or to collect goods). It leads to a spatial share of the market, which is very different from that which would be given by a generalised cost. The second method fits with situations where the role of time is uncertain. Then the proposed method is to look for the loci where this uncertainty prevents the prediction of the modal choice; and build the geographical areas where cost plays a more or less decisive role: in some areas, cost difference is high enough to define which mode will be used; in other areas, cost difference is not high enough to explain the choice. It is in these cases that the choice is uncertain and that time (or other supply characteristics) may play the first role. The interest of this method is to show the places, the geographical shape and expanse of the areas where choice is uncertain. It is in these areas that transport competition is the strongest. This presentation takes into account time and cost to examine rail-road competition. It improves the definition of the intermodal market area. For the covering abstract see ITRD E124693.