Shipper Ghost Lanes - Hidden Costs and Consequences

Truckload transportation services procurement is costly and time-intensive. These months-long procurement events typically result in thousands of contracts between shippers and carriers. The contracts cover each of the shipper’s product distribution lanes or origin-destination pairs. Due to truckload supply and demand uncertainty, shippers often adopt a coverage strategy to secure contracted capacity on combinations of lanes to meet expected demand. However, this strategy leads to unnecessary costs and inefficiencies. We find that many lanes never end up being utilized. We refer to contracted lanes on which no business materializes as "ghost lanes." On today’s episode, research scientist David Correll speaks with Tilburg University postdoctoral researcher Angela Acocella Ph.D. '22 on the hidden costs and possible reasons for ghost lanes. Read more. https://ctl.mit.edu/pub/workingpaper/hidden-costs-not-so-friendly-ghost-lanes