Urban vans, e-commerce and road freight transport

Abstract

A city will typically depend on at least 150 supply chains and freight is a key part of them. This article aims to explore at the qualitative and qualitative level (1) how e-commerce drives both travel and urban freight transport and (2) to estimate how various manufacturing activities determine the stability of demand for freight transport. The article provides elasticity estimates on (1) the demand for road freight transport for five industry sectors using a time series framework; data on GDP (gross value added) and on fuel costs per t-km (tonne-km). A key finding is that e-commerce induces freight traffic, by vans, but the decline in freight intensity of the economy is only temporary since urban economic activity contributes to growth of freight. Our analysis of five manufacturing sectors confirms that cyclical sectors are more sensitive to energy price gyrations over time than non-cyclical sectors. Price elasticities are high but comparable to other studies. The income elasticity of freight transport is large for the five sectors, but the high heterogeneity of freight sectors means that predicting this activity is challenging. It is observed that truck freight intensity (km of trucks per GVA) declines but not enough to offset the rise in energy needed to fuel the entire freight transport sector; it is likely that the rise in van freight increases the demand for freight energy in urban regions.

Keywords:

• Van traffic
• road freight transport
• decoupling trends

Funding

This work was supported by the Oxford Martin School, University of Oxford.

Acknowledements

We would like to thank the Oxford Martin School at the University of Oxford for financial support in conducting this research.

Notes

1. Official Danish statistics do not publish the split in energy use between road freight vehicles and pipelines. Danish statistics publish combined figures for pipelines and road freight but no disaggregation is made of the energy use data by Statistics Denmark (Statbank-Denmark).

2. This is a new entrant in the freight sector; an ever-increasing share of freight is moved in smaller vehicles in Denmark. Freight truck represents 86% of total freight moved; however, some freight has been taken up by pipelines and rail freight in 1980–2005.

3. This compares to an average of (UK trucks) of CO₂ emissions (heavy goods vehicles) of 138 kg-CO₂/1000 tonne-km and 360 kg-CO₂/tonne-km moved in UK vans (DfT 2004).

4. Kamakaté and Schipper (2009) analyse truck freight intensity for several OECD economies.

5. In 2006, the building materials sector holds the largest share in total truck freight moved (tonne-km); in growth terms, the same sector holds the highest growth rates out of all sectors. In terms of average shares, the foodstuffs sector holds the largest average percentage share of all truck freight (1980–2006). As in the UK, food truck-km has contributed significantly to the increase in truck freight moved in Denmark.