Joint Model of Freight Mode and Shipment Size Choice

Mode and shipment size choice are among the most critical logistics decisions but are typically studied separately in freight demand studies despite their strong correlations. The study described in this paper used an innovative copula-based framework to model freight mode and shipment size choice simultaneously as a joint decision-making problem. The study used a copula-based joint multinomial logit–multinomial logit model in which both mode choice and shipment size were modeled as discrete choices in a multinomial logit structure. The proposed copula-based model was intended to capture the potential effects of observed and unobserved factors that jointly affect both choices. The data used in this study were gathered through a large-scale establishment survey conducted in 2011 in the United States. The survey provided detailed information on more than 1,840 individual shipments that were used to develop the disaggregate models. Results of the estimated model underline the importance of the interrelationship between freight mode choice and shipment size and suggest that common unobserved factors influencing mode and shipment size choices exist. The model provides a better way to capture the effects of observed and unobserved factors that affect both choices simultaneously.