Using conjoint analysis to model intermodal freight transport mode preferences

Supply chain management includes planning and management of all transportation activities. It also provides the coordination between customers, suppliers and shippers. Moreover, supply chain management balances supply and demand between product / service provider and consumers. The aim of supply chain is to deliver the right good at the right time to the right place.It is important to offer the least cost opportunity to the customer while achieving this aim. Supply chain logistics focuses on movement and storage of materials or parts from suppliers to production and installation factories, warehouses and retailers. Main transportation modes in logistics are railway, highway, water, airways and pipeline. While choosing the transportation mode; cost, speed and credibility must be examined. The decision criteria may vary from product to product, city to city and country to country. Intermodal transportation is delivering goods using containers, swap bodies and trailers rather than usual handling in the process of moving goods from one transportation type to another. In order to call something intermodal it has to use at least two transportation modes. Over the last thirty years, considering that most of the worldwide trading operations have been globalized, long range needs made unimodal transportation model insufficient. The use of standardized intermodal transportation units (eg containers) has become widespread, enabling the transport of goods and materials by different types of vehicles and facilitating easier operational operations in warehouses / terminals.. It has been highly debatable to determine intermodal criterion to choose which mode should be used in intermodal transportation. The aim of this thesis is to determine the criteria affecting the mode selection in intermodal transport and their importance ratings. In line with this aim, research papers on transportation decision have been examined. The reviewed studies mainly use decision support methods, integer programming and surveys. Today, Intermodal Transportation is a highly preferred method for both senders and carriers. The benefits of Intermodal Transportation approved in a lot of research papers. Freight transport mode choice is an important decision in logistics and supply chain management. Shipper's freight modal choice depends not only on the attributes of the commodities to be transported, and attributes of shipments but also on service characteristics. Mode choice problem can be modeled as a multi-criteria decision process. The mode choice is aimed primarily at maximizing time and cost. The aim is to select and use the most appropriate mode combination. At the same time, the wishes and opinions of the parties should be considered. In addition to all these, it is important to determine what other criteria affect the mode selection. In these days when unimodal transportation is no longer attractive, defining and prioritizing the criteria that affect multimodal transport decision makes both the sender and the carrier advantageous. The criteria list gathered from the literature is narrowed down to six using expert opinions. These are: cost, time, carbon dioxide emission, company reliability, damage and losses and transportation mode. In our research we want to identify the priority levels of these criteria. There have been several research papers on determining these priorities on intermodal transportation. Decision support analysis is highly popular. Considering the supplier and carrier opinions, we decided to organize a survey. Since the decision we focus on is choice based, we decided to use Conjoint Analysis method. Conjoint Analysis is a systematic tool for creating and ranking potential design configurations with multiple conjoined features to measure decision maker's preferences. In the thesis, we plan to examine the decision maker's preferences of mode choice based on selected criteria. Conjoint Analysis, is a research technique to find out the preferences about product specifications, learn how price changes affect the demand on the product or services and to predict recognition of the product when it is launched. The goal is to divide the total evaluation into pieces which can be calculated in a form of levels of attributes. The theory is about both evaluation points (dependant variable) and every attribute levels (independant variable) and conditions where a predetermined combination rule exists. Utility is the most fundamental concept in conjoint analysis and the conceptual basis for measuring value. Utility is assumed to be based on the value placed on each of the levels of the attributes (partworth). The respondents react to varying combinations of attribute levels with varying levels of preference, thus we can calculate the total utility of a product/service with any combination of attribute levels. There are different ways to show product profiles. Today the most popular technique is Choice Based Conjoint (CBC) which participants are asked to make a choice from multiple product concepts. CBC, is a sub-family of analytic analysis techniques used for naming the determined experiments and analyze them. In a choice experiment, a tester is presented with a few options from a parameterized field to choose his or her preference. Calculating these is only an observation of tester choices. In this study Sawtooh Software (Lighthouse Studio 9.5.3) was used to design the software and analyze the results. Surveys target audience has been chosen from logistics companies, their employees, and shippers. More than 200 returns were made to the survey, which fits the assumptions of the analysis. Utility values were derived by Hierarchical Bayes (HB) estimation and used to explain shippers' transportation service preferences. As a result of the analysis, reliability is ranked first and followed by losses and damages, time, cost, carbon emission and the transportation mode.. In the ranking of the criteria, the effects of the selected product and the sender type is observed. Based on results from all respondents' and clustered respondents' preferences the thesis provides recommendations to logistics service providers for service design and to shippers for decision support.