transportation/logistic strategy express carriers: traditionally restricted to shipments under 150...
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![Page 1: Transportation/Logistic Strategy Express Carriers: Traditionally restricted to shipments under 150 lbs LTL: Defined by the ICC as shipments up to 10,000](https://reader035.vdocuments.mx/reader035/viewer/2022070400/56649f125503460f94c250f9/html5/thumbnails/1.jpg)
Transportation/Logistic Strategy
Express Carriers: Traditionally restricted to shipments under 150 lbs
LTL: Defined by the ICC as shipments up to 10,000 lbs
TL: Full truckloads of 40,000 lbs
Actually a lot of competition between segments
Basic Competition
Motor Carrier Competition
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Transportation/Logistic Strategy
Small shipments are a problem of long standing.
Express Carriers do well with shipments under 150 lbs.
LTL does well with shipments over 500 lbs.
Shipments between 150 lbs and 500 lbs are a problem.
FedEx and UPS moving into LTL, but not set up for it.
Express vs LTL
Motor Carrier Competition
![Page 3: Transportation/Logistic Strategy Express Carriers: Traditionally restricted to shipments under 150 lbs LTL: Defined by the ICC as shipments up to 10,000](https://reader035.vdocuments.mx/reader035/viewer/2022070400/56649f125503460f94c250f9/html5/thumbnails/3.jpg)
Transportation/Logistic Strategy
Express LTL
$
150 lbs
LTL MarketExpress Market
500 lbs
?
6k 10k Volume
~
Express vs LTL
Motor Carrier Competition
![Page 4: Transportation/Logistic Strategy Express Carriers: Traditionally restricted to shipments under 150 lbs LTL: Defined by the ICC as shipments up to 10,000](https://reader035.vdocuments.mx/reader035/viewer/2022070400/56649f125503460f94c250f9/html5/thumbnails/4.jpg)
Transportation/Logistic Strategy
Express vs LTL
Motor Carrier Competition
Small Shipment Specialists (SSS)?
Opportunities for new carriers with specialized equipment?
Focus on shipments form 150 to 500 lbs?
Focus on service?
![Page 5: Transportation/Logistic Strategy Express Carriers: Traditionally restricted to shipments under 150 lbs LTL: Defined by the ICC as shipments up to 10,000](https://reader035.vdocuments.mx/reader035/viewer/2022070400/56649f125503460f94c250f9/html5/thumbnails/5.jpg)
Transportation/Logistic Strategy
Express LTL$
150 lbs
LTL MarketExpress Market
500 lbs
?
6k 10k Volume
SSS*
~
Express vs LTL
Motor Carrier Competition
![Page 6: Transportation/Logistic Strategy Express Carriers: Traditionally restricted to shipments under 150 lbs LTL: Defined by the ICC as shipments up to 10,000](https://reader035.vdocuments.mx/reader035/viewer/2022070400/56649f125503460f94c250f9/html5/thumbnails/6.jpg)
Transportation/Logistic Strategy
LTL vs TL
Weight Breaks Between Modes
Many traffic managers use TL for shipments of 6K to 10K
Some competition between LTL and TL, but also a gap in service:
LTL prefers 1,000-5,000 lbs;
TL will try to re-sell the capacity remaining.
LTL vs TL
Motor Carrier Competition
![Page 7: Transportation/Logistic Strategy Express Carriers: Traditionally restricted to shipments under 150 lbs LTL: Defined by the ICC as shipments up to 10,000](https://reader035.vdocuments.mx/reader035/viewer/2022070400/56649f125503460f94c250f9/html5/thumbnails/7.jpg)
Transportation/Logistic Strategy
LTL vs TL
Motor Carrier Competition
Weight BreaksA point of indifference between a given rate
and a rate charged for a larger volume
TL
LTL
Volume
$
V*
![Page 8: Transportation/Logistic Strategy Express Carriers: Traditionally restricted to shipments under 150 lbs LTL: Defined by the ICC as shipments up to 10,000](https://reader035.vdocuments.mx/reader035/viewer/2022070400/56649f125503460f94c250f9/html5/thumbnails/8.jpg)
Transportation/Logistic Strategy
Weight Break Example
TL Cost[1] = LTL rate * Volume (V)
Ship 6,000 lbs from Fayetteville, AR to Phoenix, AZ (1,200 Miles)Actual Rate via ABF = 60.58; with 60% Discount = $24.23/cwt
TL Cost = $1.25/Mile * 1,200 Miles = $1,500.00LTL rate for 5,000 to 10,000 lbs = $25.00/cwt
$1,500 = 25.00 * V1,500/25.00 = VV = 6,000 lbs
If shipment is less than 6,000 lbs, ship LTLIf shipment is over 6,000 lbs, ship TL (pay for the entire truck)
[1] TL Volume at 40,000 lbs
LTL vs TL
Motor Carrier Competition
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Transportation/Logistic Strategy
TL
LTL$
150 lbs
LTL Market TL Market
500 lbs
?
6k 10k Volume
~
LTL vs TL
Motor Carrier Competition
![Page 10: Transportation/Logistic Strategy Express Carriers: Traditionally restricted to shipments under 150 lbs LTL: Defined by the ICC as shipments up to 10,000](https://reader035.vdocuments.mx/reader035/viewer/2022070400/56649f125503460f94c250f9/html5/thumbnails/10.jpg)
Transportation/Logistic Strategy
LSS = Large Shipment Specialists
Opportunities for new carriers with sophisticated information systems?
Jevic, Holland – Others?
Carriers that handle large LTL shipments (i.e., 6k to 20k) like TL carriers (i.e., door-to-door, without terminals).
Role of Density?
Role of Intermodal?
Role of Information?
Motor Carrier CompetitionLTL vs TL
![Page 11: Transportation/Logistic Strategy Express Carriers: Traditionally restricted to shipments under 150 lbs LTL: Defined by the ICC as shipments up to 10,000](https://reader035.vdocuments.mx/reader035/viewer/2022070400/56649f125503460f94c250f9/html5/thumbnails/11.jpg)
Transportation/Logistic Strategy
TL
LSS*
6k 10k Volume
$
150 lbs
TL Market
500 lbs
LTL
?LTL Market
*LSS = Large Shipment Specialists
~
LTL vs TL
Motor Carrier Competition
![Page 12: Transportation/Logistic Strategy Express Carriers: Traditionally restricted to shipments under 150 lbs LTL: Defined by the ICC as shipments up to 10,000](https://reader035.vdocuments.mx/reader035/viewer/2022070400/56649f125503460f94c250f9/html5/thumbnails/12.jpg)
Transportation/Logistic Strategy
Express
TL
150 lbs
Express TL
500 lbs
SSS~
SSS
6k 15k Volume
LTL
LSSLTL
$???
LSS
Motor Carrier Competition
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Transportation/Logistic Strategy
What will the industry look like in the future?
New forms of competition? or
Mega Carriers Providing Service to all Segments?
Motor Carrier Competition
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Transportation/Logistic Strategy
Carrier Selection
Available ModesSelection CriteriaCarrier CompetitionTotal Cost