The impact of bidding aggregation levels on truckload rates
Author(s)Collins, Julia M. (Julia Marie); Quinlan, R. Ryan
Massachusetts Institute of Technology. Engineering Systems Division.
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The objective of this thesis was to determine if line-haul rates are impacted by bid type, and if aggregation of bidding lanes can reduce costs for both shippers and carriers. Using regression analysis, we developed a model to isolate and test the cost effects that influence line-haul rate for long-haul shipments. We have determined that aggregation of low-volume lanes from point-to-point lanes to aggregated lanes can provide costs savings when lanes with origins and destinations in close proximity to each other can be bundled. In addition, bidding out region-to-region lanes can supplement point-to-point lanes by reducing the need to turn to the spot market. The model shows that bundling lanes can provide significant cost savings to a shipper because contract lanes of any type are on average less costly than spot moves. This thesis provides guidelines and suggestions for aggregation when creating bids during the first stage of the truckload procurement process.
Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2010.Cataloged from student submitted PDF version of thesis.Includes bibliographical references (p. 79-80).
DepartmentMassachusetts Institute of Technology. Engineering Systems Division.
Massachusetts Institute of Technology
Engineering Systems Division.