Region: Global
Country: Global / Non-Specific
Sector: Transportation
Keywords: Knowledge Lab, Transport
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Document(s):
Document Summary:
There is a global need to better understand the inner workings of trucking markets and how these relate to performance. Despite the critical role that trucking plays as a dominant mode in most countries’ freight transport task, and as a key determinant of both private logistics costs and economic externalities, remain insufficiently understood and under-studied. This report starts from the basic definition of actors as comprising trucking service providers on the supply side, shippers and beneficial cargo owners on the demand side, and the public sector, broadly defined, on the side of the public interest that is reflected in issues of import to society at large. But it is critical to delve deeper to reflect the way trucking operations are conducted in practice, by disaggregating these main actor types into further dimensions of supply, demand, and public interest factors to arrive at a more realistic view of performance.
Document Details:
Executive Summary
There is a global need to better understand the inner workings of trucking markets and how these relate to performance. Despite the critical role that trucking plays as a dominant mode in most countries’ freight transport task, and as a key determinant of both private logistics costs and economic externalities such as transportation emissions of greenhouse gases and local pollutants, trucking markets globally, and especially in developing countries, remain insufficiently understood and under-studied. In particular, the structure and operational characteristics of trucking markets, typically complex and atomized, remain opaque to the policy makers and regulators whose role it is to assess sectoral performance and champion interventions to improve it. In particular, there is seldom an adequate frame of reference or benchmark to assess trucking sector policy interventions and associated outcomes in an industry that is highly context specific.
Performance measurement in the trucking industry should reflect the actors that comprise it, because “performance” means different things to different actors. This report starts from the basic definition of actors as comprising trucking service providers on the supply side, shippers and beneficial cargo owners on the demand side, and the public sector, broadly defined, on the side of the public interest that is reflected in issues of import to society at large. But it is critical to delve deeper to reflect the way trucking operations are conducted in practice, by disaggregating these main actor types into further dimensions of supply, demand, and public interest factors to arrive at a more realistic view of performance.
Trucking sector performance is determined by the commercial view of service providers, the supply chain efficiency view of shippers and cargo owners, and the economic impact view of governments and other entities in support of the public interest. The performance assessment framework proposed by this report lays out indicators than can capture these dimensions, which are often partially missing in existing trucking sector benchmarking tools. These indicators include, on the supply side: fluctuations in unit pricing; fluctuations in demand volume; average age of the national fleet; fuel efficiency of the national fleet; utilization of the national fleet, as measured by kilometers (miles) per tractor per week, percentage of empty miles driven, and average load factors; estimates of operating ratio and returns on capital employed for the industry; and incidence of informal payments. On the demand side: loss/damage rate en-route; and on-time delivery percentage. And on the public interest side: greenhouse gas emissions factor of the national fleet and sector emissions as a share of total emissions; accident and fatality rates and marginal cost of accidents; highway infrastructure condition, and congestion level of service at priority lanes (ideally complemented by estimates of the cost of congestion); and structure of competition as measured by tonnage share of for-hire services compared to private fleets, ideally complemented by sector-wide supply-demand balance estimates.
The framework and indicators proposed intend to balance practicality of implementation with comprehensiveness of coverage in light of the multiple dimensions that define trucking sector performance. The report proposes a simple framework with a limited number of indicators that can facilitate measurement at manageable cost and level of effort.
Updated: April 12, 2022