A calculation framework and tools to estimate freight rate ... - Chalmers

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A calculation framework and tools

to estimate freight rate and carbon

emissions for road transport

Master¡¯s thesis in Supply Chain Management

Yinfan Hu

Daqi Liu (University of Gothenburg)

DEPARTMENT OF TECHNOLOGY MANAGEMENT AND ECONOMICS

DIVISION OF SERVICE MANAGEMENT AND LOGISTICS

CHALMERS UNIVERSITY OF TECHNOLOGY

Gothenburg, Sweden 2020

chalmers.se

Report No. E2020:104

REPORT NO. E 2020:104

A calculation framework and tools to estimate

freight rate and carbon emissions for road

transport

A study at Volvo Group Trucks Operations

Yinfan Hu

Daqi Liu

Department of Technology Management and Economics

Division of Supply Chain Management

CHALMERS UNIVERSITY OF TECHNOLOGY

Gothenburg, Sweden 2020

A calculation framework and tools to estimate freight rate and carbon emissions for road transport

A study at Volvo Group Trucks Operations

Yinfan Hu

Daqi Liu

? Yinfan Hu, 2020.

? Daqi Liu, 2020.

Report no. E2020:104

Department of Technology Management and Economics

Chalmers University of Technology

SE-412 96 G?teborg

Sweden

Telephone + 46 (0)31-772 1000

Gothenburg, Sweden 2020

A calculation framework and tools to estimate freight rate and carbon emissions for

road transport

A study at Volvo Group Trucks Operations

Yinfan Hu

Daqi Liu

Department of Technology Management and Economics

Chalmers University of Technology

SUMMARY

The high-quality estimation methods for the freight rate and carbon emissions of road transport are not

only important to improve a company¡¯s performance but also valuable to academia. This research

designed a framework embedded in a user-friendly computer tool to estimate the road freight rate and

transport carbon emissions. This tool is tested by estimating fright rates for various scenarios to meet

the business and operational demand of a case company, The Volvo Group. The framework is

designed based on the cost breakdown theory, which comprises of two sections. The first section

estimates the road freight rate, while the second section estimates the carbon emissions. Firstly, all

cost elements for both sections are identified. Each cost element is then studied and the most suitable

estimation method for each cost element is selected. Besides, considering the constraints and settings

of Volvo, specific sets of calculation methods are designed to acquire the estimated freight rate and

carbon emissions for different transport set-ups at Volvo.

In order to transform the theoretical framework into a user-friendly computer tool, two types of tools,

one using Excel spreadsheets and the other using the Excel VBA are developed for the case

company. The validation of the framework is conducted through the estimation of a set of scenarios at

the case company. The framework could demonstrate the rate structure and the carbon emissions for

the scenarios. Further, it could help the company to identify the major cost elements and prioritize

efforts in achieving cost savings. The differences between the bid prices and the estimated freight

rates are analyzed and interpreted from the aspects including imbalanced flow, relative power, and

operation-efficiency among carriers. In the case company, the imbalanced flow and different features

among carriers are proved to have more influence on the freight rate, while the relative power is not

regarded as a source of gaps.

Keywords: cost breakdown theory, cost elements, road freight rate, transport carbon emissions,

transport service purchasing, Excel VBA, estimation framework

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