FREQUENT FAILURE AMONG LESS-THAN-TRUCKLOAD MOTOR CARRIERS: THE COST OF GROWING TOO MUCH, TOO FAST
The author uses annual operating and financial statistics in a logistic regression model of firm failure, to show that the risk of expansion is associated with changes in operations and with the nature of the expansion. Specifically, changes in the average length of haul or average trailer loading can affect a firm's risk of failure. The nature of the effect depends upon firm skills (or operations) prior to the change. The nature of firm expansion is measured by comparing total change in the number of firm employees to the maximum annual change in the number of employees in the last three years. Firm expansion is found to decrease the risk of firm failure, except when all of the expansion occurs in a single year. These results suggest two factors should be considered by expanding LTL firms. First, steady growth is superior to erratic growth. Second, changing the average length of haul for carriers can increase the risk of firm failure, when changes in linehaul operations are required for shorter or longer hauls.
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Corporate Authors:
Transportation Research Forum
11250-8 Roger Bacon Drive, Suite 8
Reston, VA United States 20190 -
Authors:
- Swan, P F
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Conference:
- Transportation Research Forum, 39th Annual Meeting, Volume 2
- Location: Montreal, Canada
- Date: 1997-10-16 to 1997-10-18
- Publication Date: 1997-10
Language
- English
Media Info
- Pagination: p. 630
Subject/Index Terms
- TRT Terms: Failure; Financial analysis; Less than truckload traffic; Line haul; Logistics; Motor carriers; Operating costs; Regression analysis
- Non-Preferred Terms: Haul distance
- Subject Areas: Data and Information Technology; Finance; Freight Transportation; Highways; Motor Carriers; I10: Economics and Administration;
Filing Info
- Accession Number: 00766634
- Record Type: Publication
- Files: TRIS
- Created Date: Jul 29 1999 12:00AM