Chapter 3: Motor Carriers

Size: Ton-miles and Tons (growth of each, Figs. 3.1, 3.2)

Exceeds 1000 Billion Ton-Miles per year; grown steadily since 1980 until 2000

Tons exceeds 3500 million; also grown (recently slowed?)

Typo, p. 96; not 200 billion tons.

Compared to rail (less)

Portion of U.S. freight costs.

86.5%

Portion of U.S. freight ton-miles.

28%

Conclusion?

Local, intercity (compare with local and joint rates).

TL (irregular route) vs. LTL (regular route).

Fixed costs, terminals, pickup and delivery.

Economies of scale for which?

Number of carriers

Over 585,000

81% up to 6 trucks

Market structure; Types of carriers: for-hire (exempt, common, contract carriers) vs. private.

Cost per mile (Figure 3.10)

Total is $2.071 per mile

Competition for regulated carriers:

most from private carriers

Largest single carrier: UPS

Service Characteristics

accessibility

speed

capacity (vs. shippers' needs)

damage

customer orientation

294 miles length of haul for TL carrier;

752 for LTL shipment, 735 for RR, 900 for air

Major markets: 30,000-60,000 lb., up to 300 miles. Also 500-1,500 miles segment is important. Above 90,000 pounds? Rail.

Equipment

line-haul vehicle (tractor & trailer)

80,000

50,000

25

3,392 (for 53')

density

LCV in some states

City trucks

Special vehicles

dry van

open top

flatbed

tank trailer

refrigerated

high cube

other (auto, LNG)

Terminals

pickup and delivery

break-bulk

relay (slip seat) for scheduling drive-time and rest-time

Costs (more)

Variable 70% (up to 90%)

Fixed 30% (down to 10%)

Driver restrictions

11 hours maximum driving plus 3 hr. on duty, then 10 hr. min. rest;

60 in 7, 70 in 8 days.

Concentration (LTL, TL)

Operating Ratio: costs/revenues (93 to 96 typical)

Infrastructure

Interstate Highways 42,000 miles

90, 10; 50 percent

Federal taxes, 18-24 cents/gal. (gas, diesel; gasohol less).

State taxes, 7-18 cents/gal.

Federal tax on tires, trucks and trailers.

Highway vehicle use tax (over 55,000 lb.)

Trucks "fair share" debated because of their higher weight.

Current Issues

Safety

FHWA inspections of carriers

Shipper pressure

Alcohol & drug testing (pre-employment, physical exams, post-accident, random)

Hours of service, fatigue

Size & weight

Technology

Satellite communications

GPS; Example: hazardous materials movement

Rates (LTL)

Not regulated; shippers need to shop around

Question about anti-trust laws, unreasonably high rates

Disputed freight charges 18 months to file claim.

Financial stability

Examples of high operating ratios

10% of top 100 carriers in 1980 were in business in 1990

Table 3.2 Summary