Going Awry: Understanding Transportation Budget Failures

Abstract

The US truckload transportation industry goes through phases of over and under supply of capacity, causing a dramatic impact on freight rates and transportation budgets. External factors like macroeconomic conditions, unexpected market forces, and changing regulatory policies tend to influence the velocity of these phases. We present an analysis of factors affecting the transportation budgets within the ambit of the transportation industry and shippers’ procurement processes. The results of our research suggest that prevailing truckload market conditions impact shippers’ transportation budget accuracy. The volume variation of a lane, and the origin or destination states, also have an impact, to a lesser degree. Higher awareness of the market conditions that influence transportation budget accuracy will allow shippers to be more effective in their planning processes.