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Paper

Great Expectations: The Moderating Effects of Supplier Service Model and Market Dynamics on Relational Contract Performance

Publication Date
Under a relational contract, the value placed on expected future business must outweigh the short-term temptations to deviate for the buyer–supplier relationship to persist. Operational and relational factors that influence this trade-off have been explored, however, there is a considerable lack of research on the moderating effects of supplier and...
CTL Globe
Thesis/Capstone

Accounting for Uncertainty: An Empirical Analysis of Truckload Budgeting

Publication Date
This study investigates the United States full truckload procurement process and persistent issue of budget overruns faced by shippers during their budgeting. Despite planning through Requests for Proposals (RFPs) that forecast shipping volumes and secure contractual rates with carriers, shippers regularly confront unplanned expenses surpassing their budgets. The key problems...
CTL Globe
Thesis/Capstone

Predicting the Likelihood of a Shipment Write-Off

Publication Date
In the U.S. trucking industry, freight brokerages act as vital intermediaries between shippers and carriers, but they face financial risks due to write-offs from unpaid services. Despite the recognized importance of mitigating these financial risks, the sponsoring company does not currently have a predictive model to assess the likelihood and...
CTL Globe
Thesis/Capstone

Truckload Procurement: From State-of-the-Practice to State-of-the-Art

Publication Date
Truckload procurement practices vary widely across industry and firm spend levels. This research utilizes a framework to identify shipper behaviors that represent state-of-the-practice in truckload procurement while also highlighting shipper behaviors that represent state-of-the-art. The presented anlaysis uses data collected from 1) a survey of 300 shippers and 2) semi-structured...
CTL Globe
Thesis/Capstone

Development and Evaluation of Market-Based Routing Guide Strategy

Publication Date
The truckload market in the United States is large, fragmented, and highly competitive. Shippers utilize routing guides to manage and tender shipments to carriers. This research examines how the macro market characteristics and micro shipper characteristics affect routing guide performance. Specifically, each key market area to key market area lane...
CTL Globe
Thesis/Capstone

Forecast Drayage Demand

Publication Date
Drayage, which involves transporting goods from ports to drop facilities, has become increasingly difficult to predict due to the volatility of macroeconomic conditions. As a result, our sponsor company, a third-party logistics (3PL), sought to identify the key macroeconomic indicators that affect drayage volume and whether these indicators vary by...
CTL Globe
Thesis/Capstone

Reimagining Procurement: Differentiated vs Standardized Services

Publication Date
Our sponsor company is a leading player in the healthcare market. Its procurement organization is split into three divisions: corporate, business unit, and global services. The procurement strategy is set by corporate procurement, and then business unit and global services perform the procurement execution, and measure their procurement through metrics...
CTL Globe
Working Paper

The Hidden Costs of Not-So-Friendly Ghost Lanes

Publication Date
Firms’ (shippers’) procurement of truckload (TL) transportation services is a costly, time-intensive process. The result of these months-long procurement events is typically thousands of contracts between the shipper and transportation service providers (carriers) covering each of the shipper’s lanes (origin-destination pairs) over which it distributes products. Due to TL supply and demand uncertainty, shippers often adopt a coverage strategy to ensure contracted capacity is secured on combinations of lanes on which demand is expected. However, this strategy leads to unnecessary costs and inefficiencies.
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Thesis/Capstone

Who Are You Gonna Call?: A Smart Recommendation System for Carrier-Shipper Matching

Publication Date
For a broker in the transportation industry, one of the most critical decisions for the carrier representatives within the company is determining which carrier to select for a customer load. In order to determine which carrier would be the best for a shipment, certain criteria need to be selected in...
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Thesis/Capstone

Dynamic Approach to Freight Transportation Pricing

Publication Date
The tender acceptance rate significantly decreased between 2019 and 2021 for our capstone sponsor, Aqua Deal, a bottled beverage manufacturer. This poor primary carrier performance led to increased use of the spot market, higher transportation costs, and lower carrier service levels for Aqua Deal. In addition, during the COVID-19 pandemic...
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Thesis/Capstone

Managing Disruptions: Understanding Shipper Routing Guide Performance

Publication Date
Shippers utilize routing guides to tender shipments to carriers at contracted rates. They also tender loads on the spot market, where they compete with other shippers for carrier capacity and market pricing. Although previous studies have looked at routing guides and shipper procurement practices, none have explored the resiliency of...
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Thesis/Capstone

Defining and Detecting Churn in Truckload Transportation

Publication Date
The truckload transportation industry is an established industry, in the US, with annual revenue for for-hire truckload reaching greater than 300 billion dollars in 2019. A major problem encountered by for-hire truckload carriers is a sudden, unexpected and sustained reduction in shipment volume over lanes referred to as ‘churn’. Churn...
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Thesis/Capstone

Diving Deep into the Determinants of Driver Dwell

Publication Date
Since 2005, the American Trucking Associations has consistently asserted that trucking firms a shortage of truck drivers. This has become a narrative with which even those with no ties to the trucking industry may be familiar. U.S. Xrpess has identified that its drivers average 6.5 hours driving time per day...
CTL Globe
Thesis/Capstone

Maximizing Profits in a Warehouse and Distribution Business Using Segmentation Analysis

Publication Date
In 2019 most of sponsor company’s transactions came from its freight forwarding service. Due to strategic alliances between retail giants and freight carriers, the profit margins of independent freight forwarders are being squeezed. To survive the company needs to ensure that its warehousing and distribution services are sufficiently profitable. However...
CTL Globe
Thesis/Capstone

Should Shippers Be Afraid of Ghost Freight? An Empirical Analysis of a Customer Portfolio from TMC, a Div. of C.H. Robinson

Publication Date
Over the past several years, there has been severe market volatility in the truckload industry leading to cost increases and efficiency losses for shippers and carriers. Previous research has investigated the many factors that contribute to such market conditions. One topic that has yet to be analyzed is “ghost freight.”...
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Paper

Elephants or Goldfish?: An Empirical Analysis of Carrier Reciprocity in Dynamic Freight Markets

Publication Date
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...
CTL Globe
Thesis/Capstone

Closing the Gap Between Information and Payment Flows in a digital Transformation

Publication Date
Companies spend significant resources on digital transformation projects that do not always meet expectations. This thesis contends that these projects fail or fall short because organizations do not consider the three fundamental flows of a supply chain; materiel, information, and payment. To address the issue, this thesis develops a lens...
CTL Globe
Thesis/Capstone

Going Awry: Understanding Transportation Budget Failures

Publication Date
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...
CTL Globe
Thesis/Capstone

Predicting and Planning for the Future: North American Truckload Transportation

Publication Date
The trucking industry is crucial to the United States economy. An overwhelming majority of goods transported across the US are moved in trucks. For most companies, truck transportation is a prominent component that impacts their production, warehousing, customer service, and overall business performance. In fact, trucking constitutes one of the...
CTL Globe
Thesis/Capstone

Scenario Planning for Offshore Wind Supply Chains 2030

Publication Date
The offshore wind industry is expected to be a major contributor to climate change mitigation and renewable energy transition. Supply chain challenges abound in realizing the potential of offshore wind development. This study focuses on devising supply chain strategies especially toward China, to help energy companies fulfil offshore wind development...
CTL Globe
Thesis/Capstone

Traditional Routing Guide Performance and Segmentation to Improve Compliance With Contracted Budget

Publication Date
A strong seller’s market in 2017 and 2018 led to dramatically increased costs in transportation due to demand surpassing supply, government regulations, and a shortage of truck drivers. As a result, the carrier rejection rate by primary carriers in the routing guide increased. This research examines the performance of routing...
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Working Paper

Elephants or Goldfish?: An Empirical Analysis of Carrier Reciprocity in Dynamic Freight Markets

Publication Date
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...
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Report

Designed to Deliver - Roundtable Report

Publication Date

The MIT Center for Transportation & Logistics (MIT CTL) facilitated a series of roundtable discussions in conjunction with Uber Freight’s Deliver ‘19 conference. On September 4, 2019, more than 150 participants contributed to the discussion. The group was comprised mostly of shippers invited by Uber Freight and industry sponsors of CTL. Overall, the sessions focused on a better understanding of how to improve the efficiency and effectiveness of the relationships between shippers, carriers, receivers, drivers, and third parties.

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Thesis/Capstone

Alternate Pricing Model for Transportation Contracts

Publication Date
Transportation spend is an increasingly relevant topic of concern for all manufacturing companies. Along with the money spent on transporting goods, service betterment has become an everyday expectation. In a tight market, when contract carriers are unable to fulfill the shipper’s demands, the shipments are tendered to the spot market...
CTL Globe
Thesis/Capstone

Root Cause Analysis and Impact of Unplanned Procurement on Truckload Transportation Costs

Publication Date
The tender rejection rate by primary carriers for the TMC division of CH Robinson nearly doubled from 2015-16 to 2017-18. An increase in tender rejection rates directly results in an increase in transportation costs for shippers. Increasing demand in the market from 2015 to 2018 was a major cause of...