Pakistan Road Freight Industry: an Analysis of Tariffs, Revenues and Costs

A study of Pakistan’s private road freight Irenspofl industry was undertaken and data on freight tariffs, vehicle utilisation, revenues andoperating costs were analyzed, Over a period of four years it was found that average !afiff levels closely followed the rate of inflation with a small marked seasonal variation depending on trip direction. Using multiple regression analysis of crosssectional data, tariffs were shown to be a function of trip distance, trip time, direction, vehicle type and load weight. Only in the comparison of extreme conditions was roughness found to provide some additional explanation of freight tariffs. Oosewed revenues and costs were compared ‘withpredictions of vehicle operating costs given by the World Banks Highway Design and Maintenance Standards Model (HDM) and by the Transport Research LaboratoV’s Road Transport lnvestm6nt Model (RTIM). It was found that, in Pdkistan’s conditions, the models would over-estimate the reduction in the perkilometre vehicle oparating costs from improving the road network. Howaver allowances would also have to be mada to !ake account of the greater loads carried on smooth roads. An analysis of trends with vehicle &ge l~~dicatedthat annual travel fell with increasing vehicla age while maintenance costs rose. An examination of vehicle profitability showad that two-axle Bedford trucks (with 7 tonne load design capacity) were likely to be far more profitable on short distance routes (below 700 kms) while trucks with larger capacity were likely to be more profitable on longer distanca routes. The report supplements TRRL Resaarch Reports314 and VJ3,