Cal Poly Pomona
Belman and White (2005) characterized the average length of haul as a measure of productivity, noting that there had been increases in several commercial vehicle sectors. Changes in this measure, according
to these fleets.
authors, could be The measure can
related to load be negatively
consolidation, route optimization, and-or affected by congestion, particularly if
the use a time
of dedicated constraint is
associated with a haul. The operating ratio is Interestingly, many freight transport providers operating ratios (i.e., revenues and expenses are
one of the simplest measures of financial performance.
particularly the motor carriers – function at very high
nearly equal). Railroad operating ratios tend to be lower,
around 80%, and may suggest a potential for greater profitability. revenue and expenses, or what is included in these, can vary, interpretation of the operating ratio in each individual case. The operating ratio is suggestive of an inability to cover costs.
Given that how an operator defines it is difficult to pinpoint an exact consensus, however, is that a high
Revenue per ton-mile, tonnage and ton-miles (or barrel-miles) are all load- and haul-related measures. Ton-miles, in particular, are tabulated across all modes on national and international scales, and are used as key benchmark of freight movement activity. The four main freight modes – trucks, railroads, ships and pipelines – are surprisingly well balanced in the U.S. in terms of their proportions of total ton-mileage. It is interesting that the balance exists amidst deregulated industries, although it is not clear if deregulation precipitated the balance, or if there is a gradually evolving shift toward certain freight transport modes. Ton-miles, as a measure, has been criticized for not distinguishing between the affects of productivity and consist (vehicle or vessel size) changes (Levine 1985). The measure affects goods movement policy decisions despite this flaw (Gerondeau 1996). Ideally policy and corporate decisions should also consider other performance measures.
Finally, terminal dwell time and the empty miles factor are measures of “unproductive time.” Freight transport providers probably try to reduce these measures, to improve efficiency and productivity. If containers are used, then the manner in which they are stacked and stored becomes a function of dwell time (Huynh 2007). Vachal and Bitzan (2005) noted that dwell time was positively correlated with transportation price, in part because of the negative effect of dwell time on system capacity. The empty miles factor is an alternative “version” of dwell time, in that it is a measure of empty vessel movement. The measure is used primarily by motor carriers, perhaps because the other modes have greater control over the movement of empty vessels. Jordan and Burns (1984) noted that the empty miles factor could be reduced by backhauling (carrying a load from the destination back to the origin). Ultimately, however, the empty miles factor might be minimized by optimizing terminal, plant and distribution center locations, relative to supplier selection decisions. It is not clear to what extent motor carriers attempt to optimize these aspects of their businesses.
This study is merely an overview and general assessment of current performance measurement practices in freight transportation. It is anticipated that the findings of NCFRP Project 03 will point toward the establishment of performance measures that are uniform and intermodal.
Air Cargo World, “Air Cargo World’s Air Cargo Excellence Survey,” 4th edition, Mar. 2008.
American Association of Railroads, Class I Railroad Statistics, Jul. 17, 2008, www.aar.org/~/media/AAR. <accessed on Sep. 9, 2008>
American Commercial Lines, 8-K Report, Quarterly filing with U.S. Securities and Exchange Commission (Apr. 2, 2008 used), www.secinfo.com/dsvRm.1451.d.htm. <Accessed on Sep. 20, 2008>
American Transportation Research Institute (ATRI), Critical Issues in the Trucking Industry – 2007, Arlington, VA, Oct. 2007.