Estimation of Road user costs of Freight Vehicles in Ethiopia: the case of Addis Ababa-Djibouti Corridor
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Date
2017-11
Authors
Journal Title
Journal ISSN
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Publisher
Addis Ababa University
Abstract
Transport cost covers almost two-third of the total logistics costs and so its determination requires
a through consideration. The objective of this thesis was to estimate the road user costs of freight
vehicles along the Addis Ababa–Djibouti corridor. Specifically, it was aimed at assessing the existing
freight
cost
determination
procedure
and
suggest
a
road
user
costs
which
could
be
a
reference for
determination of
freight
rates.
The two basic steps in these study were assessment of the existing condition on freight rate determination
and
estimation
of
the
road
user
costs
by
vehicles.
The
primary
data
collection
method
were
interview
and
questionnaire,
where
data
was
collected
from
five
transport
companies.
Data
on
existing
tariff
determination
procedure,
parameters
considered
for
tariff
determination,
profit
margin
for
the
practical
use
and
existing
freight
rate
between
the
years
2014-2016
were
collected.
Secondary
data
were
on
the
input
data
of
HDM-4
and
on
characteristics
of
the
freight
vehicles
on
the
corridor. The determination of road user costs considered two scenarios, fully loaded and
empty freight vehicles. For both of the scenarios; a one trip case was taken into account based on
the current most common practice. The trip from Addis Ababa- Djibouti was taken to be with empty
freight vehicles while the reverse was assumed fully loaded. Road user costs was assumed to comprise the
travel
time
cost
and the
vehicle
operating
cost.
Based on the findings, the common vehicles on the corridor have a capacity between 20-40 tonnes.
These freight vehicles are owned either by transport companies or association with a ratio of 1:4.
About 52.5% of the vehicles are between service years of 1-10 while 21.8% of the vehicles are
above 20 years and the rest are in between. The practical tariff setting procedure is far from scientific
method
but
lies
on
estimation
from
the
previous
experience.
The
profit
margin
is
various
within
the
available
companies
and
ranges
from
a
minimum
of
10-15%
to
a
maximum
of
above
35%.
The
estimated
road
used
costs
was
on
annual
basis
and
both
fully
loaded
and
empty
running
vehicles’
road
user
costs
are
at
substantially
the
same.
The
road
user
costs
has
an
incremental
flow
from
year
to
year,
projecting
to
five
successive
years
starting
from
the
analysis
period.
The
section-wise
pattern
of
the
road user
costs
has
similarity
with the
traffic
volume.
It could be concluded that the current tariff setting practice is unscientific, and this should call for
attention as the transport cost is the main cost component in the logistics system. The majority of
the vehicles are owned by associations and less by the transport companies. This may call for stimation of Road user costs of freight vehicles: A case of Addis Ababa Djibouti Corridor
attention for further revision as it was known that the association are less organized. Future research
direction
could
be
on
determining
road
user
costs
considering
both
external
and
internal
cost
components,
and
detail analysis on
the
impact
of the
current
tariffing
practice.
Description
Keywords
Freight vehicles, Tariff, Road Users Cost