Aggregate Low Volume Lanes, Lower Transportation Costs

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Bundling lanes can improve truckload freight rates and service

A successful and strategic truckload bidding season is about more than submitting the lowest rate possible. When shippers send requests for proposals (RFPs) that ask for point-to-point pricing on long haul truckloads (moving more than 250 miles from origin to destination), this often results in many lanes with very low—and potentially unpredictable—volumes.

In fact, research conducted at MIT’s Center for Transportation & Logistics found that 85.5% of 500,000 long-haul loads were distributed across lanes with fewer than 15 loads per year. Aggregating these low volume lanes can help carriers optimize networks, make lanes more attractive to quality carriers, and help secure more favorable contract pricing.

Keep in mind that aggregation does not deal with the addition of new shipments to a lane. Rather, it involves the reengineering of lane boundaries at the origin and the destination to include more loads than already exist in a company’s portfolio. Aggregation can be achieved:

  • Region-to-point
  • Point-to-region
  • Region-to-region

In addition to discussing the lane aggregation design options, this paper explains the two approaches studied by MIT researches as part of this project:

  • Bundling low volume lanes that have close proximity for the origin and destination sets.
  • Bundling low volume lanes in close proximity with a high-volume lane.