Modeling Carrier Truckload Freight Rates in Spot Markets
Most transportation research has focused on the cost determinants of long-term motor carrier contracts for specific lanes. However, with the emergence of third-party logistics (3PL) providers in the U.S. following deregulation in the 1980s, a significant amount of capacity for shipments is secured via spot market transactions as opposed to contracts. Carrier rates for shipments with even the same origin and destination can vary widely from transaction to transaction in this scenario. This research investigates the factors behind this occurrence and identifies the major determinants of carrier costs in spot market transactions at both an individual shipment level and at a more aggregate lane level. Additionally, it also explores a tactical planning scenario in which a 3PL provider addresses chronic fiscal underperformance on certain lanes. The research has found that factors such as distance, characteristics of the shipping lane and the required truck type are among the most important determinants of motor carrier rates at both the individual shipment and the lane level. Also, seasonality and overall market conditions play a major role in determining rates for truckload shipments. The study then goes on to show that the results of the cost determinant analysis may be used to set better baseline prices on underperforming lanes.
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Supplemental Notes:
- This paper was sponsored by TRB committee AT015(4) Paper reviews -- Logistics.
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Corporate Authors:
500 Fifth Street, NW
Washington, DC United States 20001 -
Authors:
- Lindsey, Christopher
- Frei, Andreas
- Ali Babai, Hamed
- Mahmassani, Hani S
- Park, Young-Woong
- Klabjan, Diego
- Reed, Michael
- Langheim, Gregory
- Keating, Todd
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Conference:
- Transportation Research Board 92nd Annual Meeting
- Location: Washington DC, United States
- Date: 2013-1-13 to 2013-1-17
- Date: 2013
Language
- English
Media Info
- Media Type: Digital/other
- Features: Figures; References; Tables;
- Pagination: 19p
- Monograph Title: TRB 92nd Annual Meeting Compendium of Papers
Subject/Index Terms
- TRT Terms: Markets; Motor carriers; Rates; Shipments; Third party logistics providers
- Uncontrolled Terms: Spot markets
- Subject Areas: Administration and Management; Economics; Freight Transportation; Motor Carriers; I10: Economics and Administration;
Filing Info
- Accession Number: 01476848
- Record Type: Publication
- Report/Paper Numbers: 13-4109
- Files: PRP, TRIS, TRB, ATRI
- Created Date: Mar 27 2013 9:37AM