Journal of Transportation Management


Pricing services of motor carriers is a dynamic process, with continuous pressure from customers to offer competitive rates and discounts. This can lead to a profusion of special arrangements with rates that poorly reflect the services rendered. This article shows how standard database systems and statistical models can be used to extract useful information from bills of lading to assist in the pricing of freight services. Summaries of business performance are produced according to terminal facility, shipping origin, shipping destination, individual shipping lane and individual customer. User-friendly statistical models are constructed to produce benchmarks for rates and revenues considering the services rendered. Differences between actual and benchmark levels of performance help to identify situations that may call for managerial reinforcement or corrective intervention. With illustrations from a major motor carrier, the authors discuss how even small motor carriers can develop such models and use them for planning their rate adjustments and managing customer relationships.