Railway pricing for automobile transport based on discrete choice model and cost accounting

Abstract

Stimulating the modal shift from road to railway of automobile transport facilitates the construction of a low-carbon freight system. This paper investigates the pricing problem of railway operators for automobile transport from the Yangtze River Delta region to the seven regions of China, taking into account the choice behaviour of shippers, the profit objectives of railway operators, and the modal shift targets of the government. Moreover, the monopoly railway operator's cost of automobile transport is calculated. The results show that the profits of railway operators are affected by their costs and road competition. The mixed logit model considering the interaction effect has a better model fit. With the increased distance, the value of time in automobile transport decreases. When railway operators of automobile transport seek to maximise profits, the optimal pricing from the Yangtze River Delta to the seven regions is different in China. To achieve the government's targets of modal shift and unchanged railway operator profit, the government can reduce rail access charges, and the required reduction varies from region to region. This study aims to help railway operators of automobile transport with pricing and to provide analytical tools for government policy making.