EXAMINATION OF COMPETITION IN THE TRUCKLOAD INTERCITY MOTOR CARRIER FREIGHT INDUSTRY

This note reports on preliminary findings of the Association of American Railroads (AAR) Truck & Waterway Information Center (TWIC). Briefly, these findings are: 1977 intercity motor carrier truckload linehaul costs averaged about 63found per running mile; Variations in these costs can range in actual practice from about 55found per mile to 75found per mile. Costs variability is due to many factors, most importantly miles driven per year, type and age of equipment used, and nature of trucking operation; Gross revenues for most types of truckload freight average between 90found and $1.20 per loaded mile; After allowing for empty haulage, the motor freight revenues support both carriers and drivers in the intercity truckload business at a "competitive" level, i.e., revenues cover essentially all the opportunity costs associated with the intercity truckload freight business. In sum, the intercity truckload business seems to be a competitive business--even before formal deregulation has taken place. This represents considerable testimony to the efficiency of individual entrepreneurship. This result also suggest that deregulation will not make much difference in the economics of truckload trucking. Rate reductions of no more than 2% could occur, probably much less. Owner-operators are viable in the competitive sense. New entry operates to eliminate excess profits and the long term supply of capacity in this trucking sector seems assured.

  • Supplemental Notes:
    • From the Proceedings of the 20th Annual Meeting, Transportation Alternatives in a Changing Environment, Chicago, 29-31 October 1979.
  • Corporate Authors:

    Cross (Richard B) Company

    Oxford, Indiana,   USA  47971
  • Authors:
    • Case, L S
  • Publication Date: 1979

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Filing Info

  • Accession Number: 00303242
  • Record Type: Publication
  • Report/Paper Numbers: Proceeding
  • Files: TRIS
  • Created Date: Apr 22 1980 12:00AM