A managerial-economics analysis of selected Midwestern Class I motor common carriers of refrigerated commodities
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At least 60 per cent of the food consumed in this country requires temperature control in the distribution process. Although regulated motor carriers transport important quantities of perishable products, the organisational characteristics, business practices and emerging trends of intercity refrigerated trucklines are not well understood by students of agricultural business and marketing. The major purposes of this study were: (1) to describe and analyse managerial and economic factors of Midwest motor common carriers engaged in refrigerated transport, and (2) to identify obstacles to business efficiency. Fifteen large Midwest trucklines were selected for empirical investigation. Eight companies were specialised refrigerated products carriers, and seven were general comedities carriers who operated at least twelve refrigerated trailers. Company executives were interviewed in 1964. Financial and operating data for I960 and 1963 were obtained from secondary sources. A comparative analysis of specialized and non-specialized carriers included: objectives, organisation, size of business, financial situation, business methods, competition, and problems. The non-specialized group had bern organized a longer period of time, owned more assets, earned larger revenues and transported more total tonnage than the specialised group. Perishable commodities aeoounted for an estimated 1$ per cent of non-specialised carrier tonnage. The truckload refrigerated service commonly involved meat products. Refrigerated shipments were transported an average distance of 350 miles over regular routes, and the cargo helped to correct the effects of uneven carrier traffic patterns. Although opportunities appear to exist for continued development of refrigerated traffic, most carriers did not plan to expand beyond present levels of output. The activities of non-specialised companies were organized by terminals and functional departments. The carriers have not always followed the desirable procedure of centralized refrigerated dispatch with close supervision by a limited number of management personnel. Consolidated terminal production reports precluded the analysis of particular refrigerated shipments. Market analysis of active and potential customers would provide a means of optimising business decisions. The specialised group, though more recent in development, has shown a remarkable growth from 1960 to 1963. The nature and organization of long distance trucking, coupled with a growth in shippers' demand for specialized services, have contributed to this expansion. Furthermore, the carriers planned to expand terminal facilities, sales personnel and refrigerated equipment. The specialized group provided truckload service primarily to the Midwest meatpacking industry. The outbound refrigerated shipments were transported an average distance of 1,345 miles over irregular routes. Low revenue exempt perishable commodities were often handled on the return haul because of commodity restrictions in carrier operating certificates. The specialized companies were organized by type of customers and by functional departments. A continuous program of research and education appeared necessary to assist the executives to develop standards of performance and improve the control of drivers and equipment. Automatic temperature recorders on trailers would provide factual information for management control purposes, but the innovation was not commonly used. The most competitive form of refrigerated transportation was the specialised motor common carrier. All-rail piggyback appeared to be a substitute to some long distance refrigerated carriers. Private carriers of refrigerated products represented competition to some non-specialized trucklines. Managerial and economic problems were found to be the most troublesome and important areas facing trunkline administrators. The priority problems weres excessive delays at destination to unload) increased competition from Illegal trucking; lack of claims control and prevention; inadequate driver selection and training; lack of desirable backhaul freight; and ineffective middle management development and training. It was also observed that most companies needed to clarify corporate objectives, expand research and long range planning efforts, and analyse less than truckload refrigerated service.
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