The Spring 2012 issue of JTRF contains the usual wide variety of contemporary transportation topics that is the distinguishing characteristic of JTRF. Topics in this issue include the following:
- Airline stock performance
- Electronic appraisal for right-of-way acquisition
- Electrified vehicle cost comparisons
- Private railcars in North America
- Impact on air travel due to decreased wealth
- Cross docking and freight distribution
- Rural road closure methodology
In "Baggage Fees and Airline Stock Performance: A Case of Initial Investor Misperception," Barone et al. use an event study methodology to examine the impact of baggage fee announcements on airline stock prices. The authors found evidence of large, negative abnormal returns on the date on which the airline announced an initial baggage fee on passengers' first checked bag. The results further showed that investors learned of the revenue generation caused by the baggage fees, and reacted differently to announced increases in baggage fees. They noted that subsequent announcements of baggage fee increases are correlated with positive abnormal returns on the announcing airline's stock price.
Carlos H. Caldas et al. developed an electronic appraisal method to improve the appraisal process of highway right-of-way acquisition in "Electronic Appraisal Methodology for Right-of-Way Acquisition in Highway Projects." The main objective of the research was to develop the conceptual framework and technical requirements of a new Electronic Appraisal System (EAS), which could effectively support the transmission, analysis, and storage of appraisal information. The authors also constructed a prototype of the proposed EAS to demonstrate its capabilities. The authors found that an EAS solves many of the current practices of right-of-way valuation and acquisition. The authors state that their prototype EAS offers a secure, well organized platform for the appraisers to submit their appraisal reports.
In "Electrified Vehicle Technology Trends, Infrastructure Implications, and Cost Comparisons,"David Tuttle and Kara Kockelman describe various types of plug-in electric (PEV) vehicles. They discuss market availability, technologies and trends, practical driving ranges, battery replacement and power costs, and implications for electric grid operations. They utilize manufacturers' recently announced prices for PEVs and EPA standardized test data to increase the accuracy of cost comparisons for competing vehicles. The authors found that in relatively low fuel-cost regions, such as the U.S., PEVs have a positive discounted net present value due to tax credits, assuming the original battery does not need replacement by the owner. They noted that even without the tax credits, PEVs have financial payback for drivers in higher fuel-cost regions, as long as their batteries last the vehicle's lifetime or are replaced by manufacturers under warranty. The authors also concluded that without the federal tax credit, the net present values for PEVs are negative at current U.S. gas prices.
Thomas Corsi, Ken Casavant, and Tim Graciano analyze the economic conditions of a dramatic change in railcar ownership over the past 10 years in "A Preliminary Investigation of Private Railcars in North America." They point out that private railcar ownership has increased to the point where they now account for 54% of the ton-miles and 56% of the total tonnage of all railroads. The objective of the paper is to investigate, identify, and document changes in railcar ownership and offer some implications on the future of the rail industry. The authors review current car-hire practices, car rules, and interchange rules that may restrain investment in the private railcar fleet. The authors concluded that the financial returns to private car owners are barely compensatory. They found that the rate of return on investment is at least 30% below the lowest risk-free Treasury Bill. They note that a large decline in private railcar investment could pose a serious threat to the railroad industry, rail shippers, and the U.S. economy.
In "Disappearance of American Wealth and Its Impact on Air Travel: An Empirical Investigation," Dipasis Bhadra measures the impact of the Great Recession (2008-2010) on U.S. wealth and air travel. The objectives of the paper are to answer two questions: (1) Does wealth have any quantifiable impact on U.S. air travel? and (2) What has been the quantitative impact of wealth loss on air travel? To answer these questions Bhadra specifies a model in which the demand for air travel is a function of current income, household wealth, average fare, credit accessibility, a one-period lag of air passengers, and the interest rate. The equation was estimated for the 1990:Q1 - 2010:Q4 period. The author concluded that the household wealth loss of $17 trillion resulted in a loss of air travel demand of 730,000 passengers and a loss of $244 million. He points out that some of the lost passenger demand has been recouped (435,000) but a complete wealth-induced recovery seems far off.
Jesus Gonzalez-Feliu presents the main concepts of multi-echelon transportation with cross docking through a multidisciplinary analysis in "Freight Distribution Systems with Cross Docking: A Multidisciplinary Analysis." He explains that in a multi-echelon transportation system, the cross docking operation consists of trans-shipment of one or more freight units from an incoming vehicle into an outbound vehicle with little or no storage in between. The author's analysis includes an optimization study and an interview-based analysis. The optimization analysis uses both a geographic approach based on the concept of accessibility, and a scenario simulation analysis for collaborative freight transportation. The interview-based analysis includes a conceptual framework for logistics and transport pooling systems, and a simulation method for strategic planning optimization. The author concluded that multi-echelon transport has potential and can be accepted by practitioners and public authorities.
In "Methodology to Measure the Benefits and Costs of Rural Road Closure: A Kansas Case Study," Michael W. Babcock and Abhinav Alakshendra present a methodology that can be used to evaluate rural road investment and disinvestment proposals. The main objective of the paper is to estimate the economic impact on selected county road systems from reducing the size of the system. The objective is achieved using the transportation network model TransCAD, which calculates the minimum travel costs for all rural resident trips assuming the county network as it currently exists. Then selected low traffic volume road segments are removed from the network and TransCAD recalculates total minimum travel costs for rural resident trips. The difference between the two travel cost simulations is the cost of the assumed closed roads. The benefit of road closure is the avoided maintenance costs of the closed road segments. The authors' main conclusion is that rural counties will be able to save money by closing some relatively low traffic volume roads and redirecting the saving toward increasing the quality of other county roads.
Michael W. Babcock
Co-General Editor - JTRF
Co-General Editor - JTRF