Section 5:
Key Concepts for Shippers

Section 5 includes a variety of concepts specifically for use by shippers.  The chapter provides a detailed overview of different shipper cost metrics with particular emphasis on Cost Per Ton and transportation cost variance analysis.

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Chapter 15:  Key Concepts for Shippers
Chapter 15 provides a variety of shipper-specific truckload analysis concepts.  The chapter includes a detailed analysis of the risks of measuring and benchmarking truckload transportation costs on a per-unit-of-product basis.  The chapter also includes a detailed approach for allocating truckload transportation costs, particularly the cost of dedicated fleets.  Key topics include:
  • Shipper Transportation Cost Measurements
  • Flexible Budgeting and Transportation Cost Variance Analysis
  • Network Analysis with Carrier Shipment Data
  • Allocating Truckload Transportation Costs
  • Dedicated Fleets and Marginal Cost Analysis
  • Shipper Cost Strategies for Short Haul Pricing
  • Diseconomies of Scale in the Truckload Carrier Network
  • Volume-Based One-Way Pricing
  • Outsourcing Private Fleets to Dedicated Carriers

While this chapter is intended specifically for shippers, shippers will benefit greatly from the entire book.  By reading the entire book, shippers will develop a much deeper understanding of the truckload business model and the financial and operating challenges faced by all truckload carriers.  As a result, shippers will become better partners for carriers and improve their ability to effectively negotiate with their truckload transportation providers.

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