Is Bigger Better?
Impact of Lane Definition on
Truckload Rates
Student: Julia Collins
Student: Ryan Quinlan
Advisor: Chris Caplice
Sponsor: CH Robinson
Can Shippers Lower Transportation
Costs?
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Trucking companies submit pricing to shippers for each
shipping lane
Transportation costs are significantly higher for lowvolume lanes
Many shippers are not sure how to define origin &
destination sizes to aggregate shipping volume
There are many ways that each lane can be defined to a
bidding carrier.
Hypothesis: Aggregating low-volume lanes
will reduce average lane price
January 2010 Poster Session
Methodology
Analyzing data from 24
shipping companies across
the US
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Point to Point
•Low individual lane cost
•High maintenance cost
Using regression analysis to
predict the price of lanes
based upon:
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•No scale advantage
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Region size
Established factors
Initial Results
Increasing origin or destination size initially increases average
rate per lane
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Point to Region
Click to edit Master subtitle style
•Scaling advantage
•Higher average cost
•Low maintenance cost
Does Lane Definition Impact
Truckload Costs?
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Do buyers of transportation get lower costs by changing
the size of the geographic areas of origin or destination?
What factors affect lane aggregation strategy?
What traffic volume level needs to be reached before
bidding point to point?
Do seasonality or market capacity change aggregation
strategy?
Do higher volume aggregated lanes have less routing
guide substitution than low volume point-to-point lanes?
Optimal Combination
As region size
increases the
average eventually
increases as the
uncertainty of a
backhaul increases
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There exists an
optimal region size,
R*, for origins
and/or destinations
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Expected Contribution
•Low individual lane cost
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Improves shipper procurement process
•Avg. maintenance cost
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Defines key factors for aggregation of low volume lanes
•Low average cost
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Impact of backhaul and headhaul lanes on overall cost
•Flexibility in maintenance
Julia Collins
Ryan Quinlan