Freight Transport Modeling in Emerging Countries

2016;4(1):13–21.

Chapter 1

Issues in freight transport modeling for emerging economies: insights from Turkey

Dilay Çelebi,    Istanbul Technical University, Istanbul, Turkey

Abstract

There is a good body of literature about national freight transport models for assisting governments in developed countries with decision-making on future transport infrastructure and on transport policies. These models provide a good starting point for freight transport modeling in emerging economies; however, their capability for addressing specific issues of such countries can be limited. They may lack the representation of characteristics that are specific to emerging economies, such as policy priorities, changing governmental and regulatory structures, unstable development rates, speed of technological diffusion, transition from traditional to contemporary logistics systems, changes in the competitive structure of logistics industries, and long-term uncertainties in market structure. Such features need to be explicitly addressed in freight transportation models to enable meaningful policy analysis. In this chapter, we discuss these freight transport modeling concerns using the framework about the main issues in modeling freight transport at the national level, as presented in a study by de Jong et al. We present the insights gained from the experiences from national freight transport modeling practices in Turkey.

Keywords

Freight transport modeling; emerging economies

Highlights

• Identification and discussion of the freight modeling issues in emerging countries.

• Description of Turkish approaches to solve these issues.

1 Introduction

Although there is an interesting and growing number of studies addressing freight transport modeling for several developed countries (e.g., Tavasszy et al. (1998a), Beuthe et al. (2001), Limbourg and Jourquin (2009), Liedtke (2009), Friedrich (2010), Samimi et al. (2010), Ben-Akiva et al. (2013)), little research has been published for emerging economies. Generally, the existing models provide a good starting point for analyzing certain issues in freight transportation systems. However, they may lack the representation of characteristics that are specific to emerging economies. This chapter seeks to identify the issues specific to freight transport modeling in emerging economies by carrying out a review of the literature and some insights gained from the experiences from national freight transport modeling practices, with a focus on Turkey. Specifically, it gives a discussion of freight transport modeling concerns that are present in the context of emerging economies, based on the main issues in modeling freight transport at the national level compiled by de Jong et al. (2016). These issues are not restricted to emerging economies, and they do not exclude those issues that also occur in developed countries. This study can be a starting point for building emerging economy; specific models are tailored for solving the modeling requirements characterized by the freight transportation systems.

2 The issues in modeling freight transport at the national level

There is not a one-size-fits-all formula for national freight models. Depending on the country-specific characteristics, existing models differ in terms of their purpose, the data used, and their depth of aggregation, in corresponding measurement variables used, and in their scale of analysis. However, there are general requirements and challenges shared by all existing models (Wigan and Southworth, 2005).

A review of the main issues to consider in the modeling of freight transport at the national level is classified under four main headings by de Jong et al. (2016), as illustrated in Fig. 1.1.

Figure 1.1 Issues in modeling freight transport at the national level. Adapted from deJong, G., Tavasszy, L., Bates, J., Grønland, S.E., Huber, S., Kleven, O., et al., 2016. The issues in modelling freight transport at the national level, Case Stud. Transp. Policy 4 (1), 13–21.

In more detail, institutional aspects refers to the organization of the work on model development and use, as well as how confidence in these models can be determined and increased. Modeling requirements covers the questions about the purpose of the model and its scope and level of detail. Model philosophy and influencing factors are included in specification aspects, with discussions of new directions, such as the trend to include more aspects of logistics decisions of firms. Finally, issues related to determination of data requirements, data collection, and availability are grouped under the title data. We will use this structure to discuss freight transport modeling concerns that are specific to the context of emerging economies in the following sections.

3 Concerns in freight modeling for emerging economies

3.1 Institutional aspects

Typically, various components and elements of current transport systems are operated and regulated by different governmental agencies and private operators. In many cases, there is little coordination among those responsible for the operation of the various elements of both national and urban transportation systems. This results in each agency and operator attempting to improve those elements under its jurisdiction without consideration of the efficiency and effectiveness of the overall transportation system and sometimes at the expense of the other elements of the various modes of transport. Although this is a common characteristic for both emerging economies and developed counterparts, coordination mechanisms among related agencies are less mature in emerging economies, as they are likely to emerge with the growing economic complicacies in fairly large, open, and mature economies (Van Brabant, 2012).

The lack of coordination among agencies creates confusion in determining the objectives of the freight model. In Turkey, various studies are conducted simultaneously both in national and regional levels without any guidance from a national plan, producing a number of logistics and transportation plans, which generally fail to take into account the findings of each other. There are more than 10 regional logistics master plans prepared by local governments, focusing on a particular geographical region. These plans lack coherence, both in terms of methodologies and objectives. The scope of models used in these plans is generally set to the particular geographic area, bounded by the regional borders, ignoring the interactions with neighboring regions or relations to higher level plans. For example, there are three separate feasibility plans for constructing logistic centers in three locations (Karaman, Gaziantep, and Şanlıurfa), which are not far from each other more than 120 km. Models used in these plans are independent of each other and do not consider the changes in freight flows that may arise because of the development plans in the neighboring regions.

The principal problem in weak coordination in governance for freight modeling is the difficulty in planning the organization of modeling efforts, where continuity is of prime importance (de Jong et al., (2016)). A stable organizational environment that commits to the development, maintenance, and use of national freight transport models is important for success. However, in Turkey, different bodies and agencies in the government level share the responsibility of freight transport planning, each dealing with a different aspect. Control and planning of various freight transportation–related aspects are diversified among the Ministry of Transportation (MOT), the Ministry of Development, the Ministry of Economics, and the Ministry of Customs and Trade. However, effective coordination among the responsible authorities, which is necessary for the design of a coherent system, is lacking. As a result of the lack of a governance structure for orchestrating and controlling the planning practices in those different authorities, disagreements and sometimes conflicts naturally exist in the planning objectives and scope of the models covered in the plans prepared for those agencies. The dispersion of authorities is not necessarily broad, even under the same governance body; conflicts can be observed among diversified plans prepared by different directorates because of ill-structured control and planning mechanisms. For example, three different freight-related plans—Logistics Masterplan, Transportation Masterplan, and Maritime Development Masterplan—are prepared by the MOT in Turkey, which are all controlled by different directorates. They show a great amount of disparity in terms of methods implemented in predicting freight flows, in the data they use, and accordingly, in the results they obtained. Furthermore, the lack of coordination and distributed authority creates a competitive environment among different bodies, which even result in unwillingness in data sharing and creation of obstacles for other plans and policies.

As a response to the abovementioned issues in the development of logistics models, Turkish MOT has currently issued a declaration, suggesting that all logistics-related development plans should be developed in alignment with the national logistics masterplan, which is, in turn, developed in alignment with the national development objectives set by the Directorate of Strategy and Budget and Ministries of Industry and Technology, Trade, and Transport and Infrastructure.

Another emerging economy–specific issue in organization of freight modeling arises with lack of accountability and responsiveness because of the conflicts in regulatory structure and ill-controlled governance. The average burden of regulations is the least among the high-income countries on a comparative basis and increases progressively as per-capita income declines (Hafeez, 2003). Compared with Organisation for Economic Co-operation and Development countries, companies operating in emerging economies generally deal with more regulatory constraints, including price controls, regulations on foreign trade and currency, tax regulations and/or high taxes, policy instability, and general uncertainty regarding the costs of regulation (Tybout, 2000). High level of ill-structured regulations creates significant difficulties and complications in modeling freight systems and in making reliable predictions for the evolution of industrial and transport systems. As a result, developing freight models for systems controlled by high level of regulations requires modelers to navigate a myriad of complexities, uncertainty, and rapid structural changes that determine the behavior of the logistics industry. For developing a realistic and correctly defined model, the regulatory intricacy should be resolved, and the decisions relevant to freight flows should be modeled under the consideration of the regulatory interferences. Moreover, models should be developed to allow designing scenarios for simulations for various policy interventions and analyzing the impacts of policy measures on freight flows and the environment (e.g., SMILE by Tavasszy et al. (1998b)). System dynamics approach may be helpful to analyze interdependencies between policy interventions and freight transport demand along the entire transport chains. A well-working example for Europe is ASTRA (Assessment of Transport Strategies), which is used for the strategic assessment of policy scenarios, taking into account feedback loops between the transport system and the economic system (Fiorello et al., 2010). System dynamics models, however, usually do not contain sufficient spatial and network details to yield zone-to-zone flows and link loadings.

3.2 Requirements

The scope of the model and the level of detail of a freight model depend strongly on the issues under investigation. Typical questions include freight flow forecasts, factors influencing vehicle type and route choice, spatial and economic effects, optimal location of logistics centers, and effects on reliability, congestion, and environment (de Jong et al., 2016). The composition of the questions asked determines the model characteristics and required modules to be implemented. As a matter of course, freight models show disparities between developed and developing countries in terms of questions asked and modeling requirements. A major difference lies in the purpose of the model because of structural differences and policy priorities.

Many emerging economies suffer from structural problems, which affect the industry, economy, and transport systems. One of these is the urban–rural divide, which describes differences between urban and rural areas in access to transportation. The urban–rural divide is more common in the developing world than in the industrialized world, usually with rural areas being worse off than urban areas (Ellis, 2000). Because the impact of investments in urban areas is higher and more direct, policymakers tend to favor urban areas in setting investment priorities. On the other hand, it has to be noted that national and international policymakers regularly stress the importance of increasing basic human needs, infrastructure, and economy in rural areas. Many emerging economies, such as China (Parish, 2016), Nigeria (Filani, 1993), India (Maparu and Mazumder, 2017), and Nepal (Byg and Herslund, 2016), therefore, have rural development schemes in place for years. Fig. 1.2 illustrates industrial location quotients of different regions of Turkey (in NUTS2 (Nomenclature of Territorial Units for Statistics, Second Level) classification) for years 2007 and 2017. This figure shows not only the disparities among the regions but also the high rates of change in industrial development for each region only within 10 years. For example, industrial intensity of southeastern regions (TRC3) decreases rapidly, mainly because of the political instability in the area. Meanwhile, as a response to increase in share of service sector, a decline in industrial intensity is also visible for İstanbul region