Energy and economic benefits from economies of scale in intercity freight transportation

Abstract

Since the beginning of motorization, intercity freight transportation modes have carried an ever-increasing load and experienced a nearly continuous decline in average unit costs and energy intensity. Using a unique dataset, we demonstrate the tight, inverse relationships between the average load carried with average transport unit costs and energy intensity, which are invariant across mode, space, and time, for the countries and time periods considered. Our subsequent statistical analysis concludes that—over the last 30–35 years—economies of scale have contributed to 65–85% of the decline in energy intensity, depending on the transport mode, with only the remaining share being due to technological progress. Significant further reductions in average unit costs and energy intensity due to increasing economies of scale seem possible for particularly surface transport modes. Instead of technological advances, their realization could require legal and infrastructure adjustments.