The research described in this report, Development Of A Method To Forecast Freight Demand Arising From The Final Demand Sector, describes a framework and a research approach to achieve insight into significant components of freight transportation in Alabama and the U.S. The initial objective was to develop the ability to projecting freight traffic arising from retail sales to households or to the final demand sector of the economy. Normally, this involves shipments from distribution centers and bonded warehouses to retailers located in the state’s population centers. The research demonstrates that this final leg of a shipment’s journey to the consumer is growing very fast and evolving rapidly.
Major retail centers were identified in all of Alabama’s cities with populations of over 25,000. A selection of the retailers in these communities was chosen for a detailed analysis of their distribution network. The researchers conducted interviews to gather data about how each network operates. The information collected from the survey included the geographical region served, the physical and operational characteristics of the network, volume of traffic, and anticipated future traffic volumes. The survey revealed that most distribution networks serving Alabama can either be characterized as hub and spoke or route-based. The survey also uncovered many unique characteristics of each network.
Finally, researchers determined how to allocate freight traffic arising from the final demand sector to Alabama counties. Several variables were tested including population, employment, payroll and personal income. Through regression analysis, it was found that total personal income of residents in a county appeared to work best with population the second best predictor.
Supply chain strategies were documented and mapped for various retail and commercial networks. This information became very valuable in the ensuing communication of the final mile discussions with ALDOT and other transportation stakeholders in the state.