Impact of risk sharing on competitive bidding in truckload transportation

The purpose of this research was to evaluate whether a shipper's fuel surcharge (FSC) program affected its per-load transportation costs in the United States full-truckload (TL) transportation industry. In this study, we restricted transportation costs to line-haul charges and fuel surcharge premiums. Using ordinary least squares (OLS) regression, we examined the effect of a shipper's FSC program on its line-haul charges. We controlled for well-established transportation cost drivers, including distance and geography. We found that carriers discounted their line-haul rates according to a shipper's FSC program. The more a shipper paid in FSC premiums, the less it paid in line-haul charges. For fuel prices above $2.08 per gallon, however, the fuel surcharge premiums dwarfed the line-haul discount. This effect was most pronounced for shippers with low efficiency values. Shippers with lower efficiency values paid higher per-load transportation costs than shippers with higher efficiency values.

Department dc:contributor.department

Massachusetts Institute of Technology. Engineering Systems Division.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2012

Authors dc:creator

• Abramson, Molly (Molly Elizabeth)
• Sawant, Ajit

Advisor dc:contributor.advisor

• Chris Caplice.

• Engineering Systems Division.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/77503

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/77503