The Hidden Cost Layer Deadhead, Utilization Thresholds, and MarginFormation in Freight Carrier Operations
Authors
Shevchenko Maxim Igorevich
Share
Annotation
Carrier operating cost reported as a single per-mile figure conceals a compositional structure that determines profitability. This paper synthesizes econometric, technical, and carrier-economics literatures around one organizing question: how does a reduction in deadhead mileage or an improvement in fleet utilization translate into margin, and does that translation depend on where the affected assets sit relative to a break-even threshold? The analysis applies a cost-decomposition and threshold-translation method built on published literature. It separates operating cost into a visible layer and a submerged layer comprising detention, deadhead, and administrative friction, and it evaluates routing, network, and procurement interventions according to whether they plausibly move a fleet segment across its break-even utilization floor. The synthesis shows that algorithmic routing advances set a ceiling on deadhead reduction; carrier scale, network topology, and procurement structure set a floor beneath which no algorithmic gain can compensate for structural disadvantage.
Keywords
Authors
Shevchenko Maxim Igorevich
Share
References:
Acocella, A., & Caplice, C. (2023). Research on truckload transportation procurement: A review, framework, and future research agenda. Journal of Business Logistics, 44(2), 228-256. https://doi.org/10.1111/jbl.12333
Acocella, A., Caplice, C., & Sheffi, Y. (2020). Elephants or goldfish? An empirical analysis of carrier reciprocity in dynamic freight markets. Transportation Research Part E: Logistics and Transportation Review, 142, Article 102073. https://doi.org/10.1016/j.tre.2020.102073
Allen, T., Atkin, D., Cantillo Cleves, S., & Hernández, C. E. (2024). The traveling trucker problem. AEA Papers and Proceedings, 114, 334-339. https://doi.org/10.1257/pandp.20241044
Doskach, H. (2026a). Building a profitable trucking company in the U.S. LAP LAMBERT Academic Publishing.
Doskach, H. (2026b). Logistics efficiency and cost reduction strategies. LAP LAMBERT Academic Publishing.
Heilmann, K. (2020). Information frictions, load matching, and route efficiency in the trucking industry (SSRN Working Paper No. 3545019). https://doi.org/10.2139/ssrn.3545019
Izadi, A., Nabipour, M., & Titidezh, O. (2019). Cost models and cost factors of road freight transportation: A literature review and model structure. Fuzzy Information and Engineering, 11(3), 257-278. https://doi.org/10.1080/16168658.2019.1706960
Kool, W., van Hoof, H., & Welling, M. (2019). Attention, learn to solve routing problems! International Conference on Learning Representations (ICLR 2019).
Miller, J. W., & Muir, W. A. (2020). A new perspective on returns to scale for truckload motor carriers. Journal of Business Logistics, 41(3), 236-258.
Miller, J. W., Muir, W. A., Bolumole, Y., & Griffis, S. E. (2020). The effect of truckload driver turnover on truckload freight pricing. Journal of Business Logistics, 41(4), 294-309. https://doi.org/1111/jbl.12252
Miller, J. W., Scott, A., & Williams, B. (2021). Pricing dynamics in the truckload sector: The moderating role of the electronic logging device mandate. Journal of Business Logistics, 42(4), 388-405. https://doi.org/10.1111/jbl.12256
Muir, W. A., Miller, J. W., Griffis, S. E., Bolumole, Y. A., & Schwieterman, M. A. (2019). Strategic purity and efficiency in the motor carrier industry: A multiyear panel investigation. Journal of Business Logistics, 40(3), 204-228.
Nazari, M., Oroojlooyjadid, A., Snyder, L. V., & Takáč, M. (2018). Reinforcement learning for solving the vehicle routing problem. Advances in Neural Information Processing Systems, 31, 9839-9849.
Owczarek, P. (2024). Price valuation modeling of less-than-truckload (LTL) shipments for financial continuity assurance. European Research Studies Journal, 27(3), 209-224.
Rodrigue, J.-P. (2020). The geography of transport systems (5th ed.). Routledge.
Scott, A., Balthrop, A., & Miller, J. W. (2021). Unintended responses to IT-enabled monitoring: The case of the electronic logging device mandate. Journal of Operations Management, 67(2), 152-181. https://doi.org/10.1002/joom.1110
Solakivi, T., & Ojala, L. (2024). Environmental and economic potential of high-capacity trucks. Case Studies on Transport Policy. https://doi.org/10.1016/j.cstp.2024.101284
Trick, S., Peoples, J., & Ross, A. (2021). Driver turnover in the trucking industry: What's the cost of reducing driver quit rates? Research in Transportation Economics, 89, Article 101129. https://doi.org/10.1016/j.retrec.2021.101129
Ulmer, M. W., Goodson, J. C., Mattfeld, D. C., & Thomas, B. W. (2020). On modeling stochastic dynamic vehicle routing problems. EURO Journal on Transportation and Logistics, 9, Article 100008. https://doi.org/10.1016/j.ejtl.2020.100008
Yang, R. (2024). Geographic imbalance, search frictions, and regulation: Causes of empty miles in freight trucking (World Bank Policy Research Working Paper No. 10775).
Other articles of the issue
