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