A study of freight performance and carrier strategy

Abstract

This research analyzed freight performance to determine the groupings of attributes that influence carrier performance. Binary logistic regression and hierarchical clustering were used to identify individual and groupings of freight attributes that impacted performance success in terms of on time delivery, on time pick up, and first tender acceptance rate. From the analysis, three main performance groups of carriers were identified and their subsequent underlying attributes and strategies were analyzed. This research confirmed industry belief that differing strategies and freight profile roles result in different performance, specifically that more focused carriers tend to provide better service than unfocused carriers. Insights for shippers were gleaned from the analysis and comparison of a different shippers' carrier portfolios. From this, diversified portfolios with a higher proportion of more focused carriers were shown to have stronger performance. The significance of this research is that it offers a strategic review of groups of freight attributes that contribute to performance outcome. Within this strategic review, carriers were shown to have different underlying roles within shippers' portfolios which may suggest the need of different ways of measuring their performance.