Estimates of the Demand for Freight Transport in the Nigerian Food Industry

Abstract

Previous work on the demand for freight transportation has focused on the rail-truck substitution problem, excluding the prior private versus public trade-off, often found in transportation decision-making. Moreover, those studies that actually examine this alternative selection problem fail to consider the interdependence between the transport type choice and the shipment size decision. The purpose of this paper is to analyze shippers’ behavior. Particular attention is paid to, first, the public-private trade-off and, second, the simultaneity of alternative selection and shipment size choice. In order to provide a quantitative evaluation, as an illustrative case, the theoretical model developed was tested on data gathered by means of a sample survey conducted to Nigerian enterprises belonging to the food industry. The empirical findings showed that, all else equal, public transport is favored over private transport and that the probability of selecting purchased transport increases with transport costs and travel time.

Keywords: Nigerian food industry, freight transport, shipment, rail-truck