Carrier Bidding Behavior in Truckload Spot Auctions

Shippers utilize the spot market for trucking services negotiated on short notice for a single load or a small number of loads. This research studies three questions related to the behavior of the various participants in the spot market. The first question asks whether carriers with different market specializations behave differently in the spot market. The second question inquires whether carrier size is a factor in its behavior. The third question looks into whether prices from different carriers correlate with one another over time. Longitudinal data from a large shipper with a national presence across the United States was analyzed. The results showed that a firm's business model and size considerably affect the frequency and price of its bids. Brokers tend to bid more frequently and at higher prices than asset-based carriers. There is less auction participation from asset-based carriers because they have higher bid preparation costs and greater constraints on the availability of their trucks. Asset-based carriers also tend to bid at lower prices. Therefore, if an online marketplace develops which links shippers directly with asset-based carriers, shippers could end up paying lower prices overall.

Language

  • English

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Filing Info

  • Accession Number: 01695798
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Dec 28 2018 11:24AM