Elephants or Goldfish?: An Empirical Analysis of Carrier Reciprocity in Dynamic Freight Markets
Author(s)Acocella, Angela J. (Angela Josephine); Caplice, Chris; Sheffi, Yossi
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Dynamic macroeconomic conditions and non-binding truckload freight contracts enable both shippers and carriers to behave opportunistically. We present an empirical analysis of carrier reciprocity in the US truckload transportation sector to demonstrate whether consistent performance and fair pricing by shippers when markets are in their favor result in maintained primary carrier tender acceptance when markets turn. The results suggest carriers have short memories: they do not remember shippers’ previous period pricing or tendering consistency when making freight acceptance decisions. However, carriers appear to be myopic and respond to shippers’ current market period behaviors, ostensibly without regard to shippers’ previous behaviors.
A later version of this working paper has been published in a peer-reviewed journal and can be access here: https://doi.org/10.1016/j.tre.2020.102073
DepartmentMassachusetts Institute of Technology. Center for Transportation & Logistics
MIT Center for Transportation & Logistics
MIT Global Supply Chain and Logistics Excellence Network Working Paper Series; 2020-mitscale-ctl-01