The Determinants of Full‐Empty Truck Movements

Abstract

A model is developed to explain full-empty movement decisions for motor carriers. The model is estimated for movements to Florida of carriers serving the Florida produce/ornamentals industry. The results indicate that carriers act rationally, basing their decisions on a wide range of factors. The findings also suggest that regulatory restrictions continue to result in unnecessary empty movements.Transportation rates playa crucial role in the determination of economic activity over time and space. Despite this fact, relatively little attention has been devoted to understanding transportation markets. Indeed, it is common in interregional trade modeling to treat transportation supply as perfectly elastic. This tangential treatment of transportation markets has been identified as a major reason for the failure of many, if not most, interregional trade models to reflect adequately the economic activity being depicted (Johnson, p. 63). This article describes a study which focuses on understanding one aspect of these markets: the determinants of full/empty movement decisions. The results help to explain seasonal swings in rate levels, why some rates taper (i.e., increase at a decreasing rate) with distance, the impact of regulatory controls, and the role of expectations in carrier decision making.It is recognized that jointness in the production of transportation services favors full movements. If a vehicle goes from point ito pointj, the marginal cost of obtaining and carrying a load is the cost of search, pickup, and delivery, and the increment in fuel and labor costs over those for running empty (Mohring,. This increment is generally small when compared to total running costs. ThereRichard Beilock and Richard L. Kilmer are an assistant professor and an associate professor, respectively, Food and Resource Economics Department, University of Florida. Authors are listed in alphabetical order; senior authorship is not assigned. This is Florida Agricultural Experiment Station Journal Series No. 6483.Review was coordinated by Peter Heimberger, associate editor.fore, a large share of the transportation costs becomes a fixed cost which does not influence the carrier's full-empty movement decision process (Jara-Diaz). Despite this inducement to avoid empty movements, considerable empty movements are still observed. The Interstate Commerce Commission (lCC) found that over 20% of refrigerated trailers on interstate highways were empty (ICC, p. 12), and the estimates for specialized equipment (e.g., tank truck and bulk goods carriers) ranged as high as 40%. Empty mileage may result from restrictions in the regulatory system, be unavoidable due to freight imbalances between regions, or simply reflect carriers foregoing loads to maximize returns at another location (Paxson, Miller, and Basemann and Daugherty). However, there has been little empirical work to quantify the importance of these factors. In this article, a model is developed to explain full-empty movement decisions of motor carriers. The empirical estimation of the m...

Market access in regulated and unregulated markets: The continuing cost of interstate motor carrier regulation

“…A number of recent studies indicate that regulatory reform has had dramatic and positive effects on competitiveness and productivity (e.g., McMullen 1987;McMullen and Stanley 1988;Keeler 1989;Ying 1990a;1990b;Ying and Keeler 1991;and Boyer 1993). However, still other studies suggest that remaining restrictions continue to detract from economic efficiency by limiting the access carriers have to markets (e.g., Beilock and Kilmer 1986;Wilson and Dooley 1993). The latter studies focus on the effects regulatory reform has had on carrier decisions to serve markets in which the Interstate Commerce Commission (ICC) has historically been active in restricting entry.…”

“…In Beilock and Kilmer (1986), analyzing the same traffic in 1982-83, 31 percent of carriers held authority. In Wilson and Dooley (1993), analyzing traffic in and out of North Dakota in 1986, only 40 percent of carriers held authority.…”

“…Previous studies that examine the effects of entry regulation on market access use data that pertain to only one leg of a trip. In those studies (Beilock and Kilmer 1986;Wilson 1987;Wilson and Dooley 1993) the authors examine carrier decisions to access markets having a preponderance ofregulated traffic. Using different specifications and data, Beilock and Kilmer (1986) and Wilson and Dooley (1993) each find that carriers with Authorities have an advantage over carriers without Authorities in accessing markets.…”

Refrigerated Trucking Revisited

“…While it proved impossible to calculate exact refusal rates, at all stations and during all interview periods, refusal rates were well under 10% and there were no indications of non-response bias. To identify trends, comparisons are made among the results of the 2001-2002 survey and similar surveys conducted in 1982(see Beilock and Fletcher 1983) and 1985-1986 (see Beilock, MacDonald, and Powers 1988).…”

“…But are the 'correct' empty movements being made? Beilock and Kilmer (1986) presented theoretical arguments that efficient transport systems would be characterized by higher empty movement rates for shorter, rather than longer, distances.…”