AN APPROACH TO ANALYZING A LARGE URBAN FREIGHT MARKET FOR TRANSPORTATION COMPANIES

THE FAILURE OF THE TRANSPORTATION INDUSTRY TO UTILIZE MARKET RESEARCH TECHNIQUES IS NOTED AND AN EXPLANATION IS OFFERED. SOME OF THE PROBLEMS ARE (1) TRANSPORTATION MODES ARE SERVICE COMPETITIVE-BASED ON TONNAGE; (2) TRANSPORTATION IS DEMAND ORIENTED; (3) THE TRANSPORTATION INDUSTRY IS MORE LIKELY TO REDUCE COSTS IN THE AREA OF OPERATIONS; AND (4) FINANCIAL DIFFICULTIES HAVE IN THE PAST MEANT THAT MARKETING RESEARCH IS THE FIRST AREA TO BE REDUCED OR ELIMINATED ENTIRELY. ALSO PROBLEMS INHERENT TO EACH MODE - RAILROADS, MOTOR CARRIERS, WATER CARRIERS, AND AIRLINES-ARE DISCUSSED. THE MARKET ANALYSIS APPROACH IS BEST DESIGNED FOR FIRMS THAT ARE DIFFUSED THROUGHOUT A METROPOLITAN AREA: IT IS PARTICULARLY ADAPTABLE TO EXAMINING MARKETS FOR PIGGYBACK, CONTAINER LOAD, TRUCKLOAD, AND LESS THAN TRUCKLOAD TRAFFIC. THE FIRST STEP IN ANY MARKET ANALYSIS MUST BE A DEFINITION OF THE COMPANY'S CURRENT MARKET POSITION. THE NEXT STEP IS TO ANALYZE THE METROPOLITAN AREA, SPECIFICALLY BY NOTING THE VARIOUS COMMODITIES FOR ORIGIN AND DESTINATION PURPOSES. A NET REVENUE ANALYSIS OF THE CURRENT MARKET WILL REVEAL THE COSTS FOR HANDLING CERTAIN CLASSES OF COMMODITIES, BASED ON DISTANCE. FINALLY POTENTIAL MARKETS SHOULD BE ESTIMATED EITHER BY (1) STUDYING THE CARRIER'S CURRENT ROUTE STRUCTURE AND OFF-LINE SALES AND/OR (2) USING THE 1967 CENSUS OF TRANSPORTATION PRODUCTTION AREA SERIES TO DETERMINE WHETHER COMMODITIES ARE PROFITABLY FLOWING BETWEEN THE PREVIOUSLY DEFINED MARKET AREAS. A HYPOTHETICAL CASE STUDY IS PRESENTED TO ILLUSTRATE A MARKET RESEARCH ANALYSIS.

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  • Accession Number: 00202220
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Sep 30 1972 12:00AM