IDEAS home Printed from https://ideas.repec.org/a/wly/transj/v61y2022i4p331-368.html

Antecedents of Spot and Contract Freight Mix in the Truckload Sector

Author

Listed:
  • Ming Li
  • Yemisi A. Bolumole
  • Jason W. Miller

Abstract

Truckload carriers face tradeoffs in their effort to build their freight networks from combinations of spot market and contract shipments. These tradeoffs exist because contract freight provides loose volume guarantees but lower linehaul rates, whereas spot freight commands higher linehaul rates while being more stochastic in nature. The issue of carriers’ mix of spot market and contract freight, while of utmost importance in practice, has received limited theoretical and empirical attention. Drawing on dynamic transaction cost theory, we develop middle‐range theory that explains why carrier traits such as size and use of team drivers as well as characteristics of the freight markets in which they are embedded impact carriers’ reliance on spot market instead of contract freight. To test our theory, we rely on archival survey data collected by CarrierLists, a firm that specializes in compiling and disseminating motor‐carrier information. Our econometric estimates corroborate our theory and remain after robustness testing. Apart from extending theory regarding dynamic transaction costs, our findings have important implications for carriers, brokers, and shippers.

Suggested Citation

  • Ming Li & Yemisi A. Bolumole & Jason W. Miller, 2022. "Antecedents of Spot and Contract Freight Mix in the Truckload Sector," Transportation Journal, John Wiley & Sons, vol. 61(4), pages 331-368, September.
    • Handle: RePEc:wly:transj:v:61:y:2022:i:4:p:331-368
    DOI: 10.5325/transportationj.61.4.0331
    as

    Download full text from publisher

    File URL: https://doi.org/10.5325/transportationj.61.4.0331
    Download Restriction: no
    File URL: https://libkey.io/10.5325/transportationj.61.4.0331?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. George A. Zsidisin & M. Douglas Voss & Matt Schlosser, 2007. "Shipper‐Carrier Relationships and their Effect on Carrier Performance," Transportation Journal, John Wiley & Sons, vol. 46(2), pages 5-18, March.
    2. Kathryn Dobie, 2005. "The Core Shipper Concept: A Proactive Strategy for Motor Freight Carriers," Transportation Journal, John Wiley & Sons, vol. 44(2), pages 37-53, March.
    3. Don Taylor, G. & DuCote, W. Grant & Whicker, Gary L., 2006. "Regional fleet design in truckload trucking," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 42(3), pages 167-190, May.
    4. Hubbard, Thomas N, 2001. "Contractual Form and Market Thickness in Trucking," RAND Journal of Economics, The RAND Corporation, vol. 32(2), pages 369-386, Summer.
    5. Warren B. Powell, 1996. "A Stochastic Formulation of the Dynamic Assignment Problem, with an Application to Truckload Motor Carriers," Transportation Science, INFORMS, vol. 30(3), pages 195-219, August.
    6. Frank Montabon & Patricia J. Daugherty & Haozhe Chen, 2018. "Setting Standards for Single Respondent Survey Design," Journal of Supply Chain Management, Institute for Supply Management, vol. 54(1), pages 35-41, January.
    7. Greene, William, 2010. "Testing hypotheses about interaction terms in nonlinear models," Economics Letters, Elsevier, vol. 107(2), pages 291-296, May.
    8. Alex Scott & Chris Parker & Christopher W. Craighead, 2017. "Service Refusals in Supply Chains: Drivers and Deterrents of Freight Rejection," Transportation Science, INFORMS, vol. 51(4), pages 1086-1101, November.
    9. Hugo P. Simão & Abraham George & Warren B. Powell & Ted Gifford & John Nienow & Jeff Day, 2010. "Approximate Dynamic Programming Captures Fleet Operations for Schneider National," Interfaces, INFORMS, vol. 40(5), pages 342-352, October.
    10. Christopher W. Craighead & David J. Ketchen & Li Cheng, 2016. "“Goldilocks” Theorizing in Supply Chain Research: Balancing Scientific and Practical Utility via Middle‐Range Theory," Transportation Journal, John Wiley & Sons, vol. 55(3), pages 241-257, July.
    11. Langlois, Richard N. & Robertson, Paul L., 1989. "Explaining Vertical Integration: Lessons from the American Automobile Industry," The Journal of Economic History, Cambridge University Press, vol. 49(2), pages 361-375, June.
    12. Papke, Leslie E & Wooldridge, Jeffrey M, 1996. "Econometric Methods for Fractional Response Variables with an Application to 401(K) Plan Participation Rates," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 619-632, Nov.-Dec..
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mariam Lafkihi & Shenle Pan & Eric Ballot, 2025. "Game—The Freight Transportation Game: Operational Challenges for Carriers in Online Spot Market Platforms," INFORMS Transactions on Education, INFORMS, vol. 26(1), pages 91-101, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Acocella, Angela & Caplice, Chris & Sheffi, Yossi, 2020. "Elephants or goldfish?: An empirical analysis of carrier reciprocity in dynamic freight markets," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 142(C).
    2. Brache, Jose & Felzensztein, Christian, 2019. "Exporting firm’s engagement with trade associations: Insights from Chile," International Business Review, Elsevier, vol. 28(1), pages 25-35.
    3. Zhiyuan Hou & Ellen Van de Poel & Eddy Van Doorslaer & Baorong Yu & Qingyue Meng, 2014. "Effects Of Ncms On Access To Care And Financial Protection In China," Health Economics, John Wiley & Sons, Ltd., vol. 23(8), pages 917-934, August.
    4. Song, Jingyu & Delgado, Michael & Preckel, Paul & Villoria, Nelson, 2016. "Pixel Level Cropland Allocation and Marginal Impacts of Biophysical Factors," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235327, Agricultural and Applied Economics Association.
    5. Peter Egger & Christian Keuschnigg & Valeria Merlo & Georg Wamser, 2014. "Corporate Taxes and Internal Borrowing within Multinational Firms," American Economic Journal: Economic Policy, American Economic Association, vol. 6(2), pages 54-93, May.
    6. Ueta, Toshimitsu, 2024. "Institutional environments and conflict between foreign investors and local communities in large-scale agricultural land acquisitions," International Business Review, Elsevier, vol. 33(5).
    7. Jason W. Miller & Jessica L. Darby & Alex Scott, 2022. "The Moderating Effect of COVID‐19 on the Relationship between Spot Market Prices and Capital Investment in the Motor‐Carrier Sector," Transportation Journal, John Wiley & Sons, vol. 61(2), pages 151-194, March.
    8. Aekapol Chongvilaivan & Jung Hur, 2012. "Trade Openness and Vertical Integration: Evidence from the U.S. Manufacturing Sector," Southern Economic Journal, John Wiley & Sons, vol. 78(4), pages 1242-1264, April.
    9. Michael S. Garver & Zachary Williams, 2025. "Logistics customer service and customer satisfaction: Importance‐based segments for motor carriers," Transportation Journal, John Wiley & Sons, vol. 64(1), January.
    10. Mahka Moeen & Will Mitchell, 2020. "How do pre‐entrants to the industry incubation stage choose between alliances and acquisitions for technical capabilities and specialized complementary assets?," Strategic Management Journal, Wiley Blackwell, vol. 41(8), pages 1450-1489, August.
    11. Zolfagharinia, Hossein & Haughton, Michael A., 2017. "Operational flexibility in the truckload trucking industry," Transportation Research Part B: Methodological, Elsevier, vol. 104(C), pages 437-460.
    12. Kristensen, Soren Rud & Bech, Mickael & Lauridsen, Jørgen T, 2013. "Who to pay for performance? The choice of organisational level for hospital performance incentives," DaCHE discussion papers 2013:5, University of Southern Denmark, Dache - Danish Centre for Health Economics.
    13. Sanghyun Hwang & Seungrae Lee, 2015. "Regional economic integration and multinational firm strategies," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 24(7), pages 968-1013, October.
    14. Philippe Bacchetta & Ouarda Merrouche, 2022. "Countercyclical Foreign Currency Borrowing: Eurozone Firms in 2007–09," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 54(1), pages 203-245, February.
    15. Alberto M. Zanni & Abigail L. Bristow & Mark Wardman, 2013. "The potential behavioural effect of personal carbon trading: results from an experimental survey," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 2(2), pages 222-243, July.
    16. Alex Scott & Christopher W. Craighead & Chris Parker, 2020. "Now You See It, Now You Don't: Explicit Contract Benefits In Extralegal Exchanges," Production and Operations Management, Production and Operations Management Society, vol. 29(6), pages 1467-1486, June.
    17. Zachary Williams & Michael S. Garver & G. Stephen Taylor, 2013. "Carrier Selection: Understanding the Needs of Less‐than‐Truckload Shippers," Transportation Journal, John Wiley & Sons, vol. 52(2), pages 151-182, April.
    18. Malley, Juliette & D'Amico, Francesco & Fernandez, Jose-Luis, 2019. "What is the relationship between the quality of care experience and quality of life outcomes? Some evidence from long-term home care in England," Social Science & Medicine, Elsevier, vol. 243(C).
    19. Wright, Harrison, 2025. "Heterogeneous effects of socioeconomic status on postsecondary educational outcomes: Evidence from the Education Longitudinal Study of 2002," MPRA Paper 123438, University Library of Munich, Germany, revised 24 Jan 2025.
    20. Hauzenberger, Niko & Huber, Florian & Klieber, Karin & Marcellino, Massimiliano, 2025. "Bayesian neural networks for macroeconomic analysis," Journal of Econometrics, Elsevier, vol. 249(PC).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:transj:v:61:y:2022:i:4:p:331-368. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.