Analysis on the determinants of shipment size and type-of-truck choices using a discrete-continuous hybrid model

When modelling freight demand, a common assumption is that decision makers decide on the commercial vehicle that best suits their transportation needs. Even though the discrete choice of vehicle type depends on the shipment size, which is a continuous variable, vehicle type choice models usually do not include any shipment size factor. The origin and destination of the cargo, the type of product, attributes related to the level of service (e.g., travel time and cost), trucking operational patterns and shipper's characteristics are also factors that determinate both choices. This paper proposes a joint estimation procedure for the discrete-continuous model based on the integrated choice and latent variable model. Our approach explicitly includes the shipment size as a continuous latent variable within the discrete type-of-truck choice. The application of the model in the Colombian context highlights the importance of considering the interrelationship between freight mode and shipment size decisions. Modelling results also suggest the presence of unobserved common factors influencing both decisions. The model was used to evaluate policies oriented to promote cargo consolidation. The evaluation suggests that increasing the tolls for small vehicles is feasible because of their higher cost sensitivity.