Dissertation > Economic > Transportation and economic > Land,road transport economy > Land,road transport, economic theory

Research on Market Behavior and Supply Structure Adjustment of Highway Freight Industry

Author FuZhongNing
Tutor ZuoZhiCai
School Jilin University
Course Transportation Planning and Management
Keywords highway freight industry highway freight market behavior analysis structure adjustment supply capacity game theory econometrics
CLC F540
Type PhD thesis
Year 2008
Downloads 370
Quotes 3
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Since the former Ministry of Communications formally opened the transport market in 1983, highway freight industry has suffered the market-oriented reform, and grown into the market allocation of transport resources on the whole. The supply capacity of freight was enhanced significantly, which is only owed to the increase in amount of trucks at the same time. Market regulation takes on spontaneity and blindness inevitably, which leads to the increasingly serious problem of surplus supply capacity. There are a great of small-scale transport enterprises in the freight market, most of which are in single-truck operation. The dominant firms in intensive operation have not yet come into being. The information service is almost provided by individual agents likewise. It can be seen that the business of freight practitioner is separate and similar. The transport production factors, such as truck, station and so on, are organized inefficiently and incompactly, and their functions are imperfect. Since the source of goods is finite and controlled, the decentralized and weak freight practitioners compete with each other focusing on price. In addition, the powerless government supervision results in disordered market. All of these have made highway freight industry in the state of low performance for a long time. It not only causes a huge waste of resources, but also hinders the vigorous development of regional economy and the adjusting upgrade of industrial structure.In order to remedy the unfavorable state of highway freight industry thoroughly, it is necessary to find out the cruxes of the matter and their causation through analyzing the trade behavior of market subjects. It is the goal that let the administrative department of government fully realize the driving and generating mechanism of some phenomena and behaviors, and clearly know the exerting point of action and the breakthrough point of policy. The objective is to readjust the supply capacity structure, to guide the highway freight industry into normal operation, and to meet the high-standard and multi-level transport demands under new environment. The market operation is based on indirect connection of social economy, which requires freight practitioner to center production target on economic benefit and market demand. The macro-control of government should accord with economic law to conduct indirect intervention. This dissertation applies the theories of microeconomics and industrial economics to examine the current status and tendency of highway freight industry. By means of econometrics, it is described as a freight demand model that certain goods want for-hire truck to carry them. The participant of freight market consists of demander, supplier and government. According to their economic contact and the restrictive relationship, the concrete market behaviors are reduced to defined game models, and the equilibrium conditions and game results are discussed. The emphases are placed on the coping strategies of supplier and the interventional measures of government. Finally, the structure adjustment of supply capacity is taken as a basic way to improve the low performance of highway freight industry. The main work and conclusion are as follows:It introduces two ordinary types of highway freight markets classified by market structure, and specifies their respective qualifications and demand curve forms. The evolution rule of freight market structure is concluded in terms of technical and economic characteristics of transport activities. It is theoretical foundation to explain why the enterprises engaging in common truckload are so numerous, and their scales are so small. It also shows that the progress of network truckload is a key to induce the whole highway freight market structure to turn into monopolistic competition. Comparing with the market structure of developed countries, the development of network truckload of our country is slow, and our highway freight market structure belongs to perfect competition on the whole.Considering the differential tariffs between foreign truck and local truck in for-hire freight market, a dual-price demand function model is established to represent the shipper’s demand for these two carriers. As to the model, because there is distinct composition of endogenous variable in different market environment, the market structure of perfect competition and monopolistic competition is taken into account separately. Using econometric software EViews 4.1, the model is calibrated with the practical transaction data about one refrigerator sales center employing for-hire truck, and the statistical test and economic relation test are performed as well. As thus, the given parameters of dual-price demand function model in definite freight market can immediately be put into Bertrand oligarch model, which infers optimal price for every game player, to calculate the most favorable tariffs maximizing the profits of foreign truck and local truck. This pricing method is able to prevent both of them from vicious competition.It investigates overload phenomenon that exists in carriers widely and response action that traffic management department takes at present. The carriers and traffic management department are looked as two players in complete information and static game. From the game situation and the discussed result, the long-acting measures to deal with overload is reducing the cost that traffic management department pays for setting up a checkpoint, so that overload probability of carriers can fall off in mixed strategies’Nash equilibrium. The radical solution is to consolidate temporary checkpoint into existing settled toll station, and to install weighing equipment in all toll stations. In this way, the initial investment of weighing equipment will be a substitute for repetitive cost of setting checkpoints, and carriers will have no chance to carry on overload.It analyzes the operating actuality of freight information market, which is a particular kind of market, and illuminates the“adverse selection”consequence arising from asymmetric freight information. To avoid this negative consequence, it is essential to add“disguise cost”which the carrier providing inferior service has to spend in pretending to afford qualified service and in cheating shippers. The“disguise cost”must be higher than the maximum price that shipper would accept. Only if this constraint is satisfied can there be a perfect Bayesian equilibrium in complete but imperfect information dynamic game that depicts the decision making process of carrier and shipper in bargaining. To eliminate asymmetric information, an exchange platform that records and reflects the real and detailed information of trading both sides ought to be build. This dissertation not only holds that the popularization of freight information exchange platform should be under the support of government and begin with local information agencies from bottom to top, but also uses evolutionary game to research the learning and conforming process of information agencies with bounded rationality, which treat the platform from attempt to acceptance. The equilibrium result shows that different pricing strategies will cause distinct popularizing effects. In the beginning, the government may offer information agencies appropriate preference and subsidy so as to encourage them to join in the platform. When the proportion of platform’s users to all information agencies in a region reaches the turning point of evolutionary trend, the government could change support policy into charging policy, but must strictly control the charging standard below the increment of use’s income. Therefore, it pays close attention to orienting administration role and determining support extent, and gives profound inspiration to government.It clarifies the specific contents on structure adjustment of supply capacity from three aspects—the regional input of station resources, the deployed number of trucks, and the organization form of transport production. Taking Gansu province for example, it utilizes data envelopment analysis to evaluate the relative efficiency and scale benefit of station resources input among regions, and to furnish adjusting scheme and controlling suggestion about investment and employee to regional station. The quantitative relation between the number of trucks in operation and the weight of goods lifted by truck is revealed via Cobb-Douglas production function. By this means, it estimates the theoretical deployed amount of newfashioned special trucks, namely, refrigerator/insulated trucks and container trucks, and indicates that truck in operation of Gansu province is during the stage of decreasing returns to scale. As far as transport organization is concerned, it insists that it should be feasible and indispensable for freight practitioners to constitute enterprise alliance and implement joint distribution, which are effective ways to adjust organization structure and are realistic approaches to promote monopolistic competition.The major innovations are:(1) The dual-price demand function model of for-hire freight market is established with the expression and estimate technique of economic system in the simultaneous equation of econometrics, and then the model is calibrated and tested respectively based on two market structures. The freight demand relation between the shipper of certain goods and the two types of carriers is obtained under the different supply condition.(2) If the both types of carriers—local truck and foreign truck, are regarded as two oligarches in for-hire freight market, their optimal pricing in pursuit of profit maximization is worked out, by virtue of Bertrand oligarch model and the given dual-price demand function model. It’s a new attempt that the associated influence of two kinds of substitutable service price on one demand is involved in pricing method.(3) For the first time, it employs the replicator dynamics equation in evolutionary game to study the behavior subjects of information market, and to simulate the process that information agencies join in freight information exchange platform in succession. The evolutionary stable strategy implies the policy for government to popularize the platform. (4) Aim at the decentralized and weak freight practitioners nowadays, it puts forward the late organization forms—enterprise alliance and joint distribution, which are operable means to raise market concentration and upgrade market structure in highway freight industry.The central idea of this dissertation is: regulate behavior and rule in tangible market, with the freight price as a clue; integrate communication channel between demander and supplier in intangible market, with the freight information exchange platform as a medium; submit a structure adjustment case on station and truck, with Gansu province as a representative; innovate upon organization form of transport production and upgrade structure of freight market, with the enterprise alliance as an access. The core of this dissertation is to describe and explain the familiar phenomena and participants’partial behaviors in highway freight market through defined game models and related economics conclusions, in order to provide action guidance and decision support for freight practitioner and administrative department of government. It proposes reasonable execution advice to revise the freight price, to rectify the market order, and to punish the unfair business activities; it advances scientific theory basis to recognize the administrative function and authority limit of government, and to arrange the deployment of supply capacity and direction of freight market; it presents expanded analysis perspective and significant demonstration reference to consider the development of highway freight industry, and to view the circumstance of highway freight market.

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