MPC
Research Projects (2000-01)

Identifying Number

MPC-202

Project Title

Truck Costing Model for Transportation Managers

University

North Dakota State University

Project Investigator

Mark Berwick
Upper Great Plains Transportation Institute, NDSU
701-231-9594
mark.berwick@ndsu.edu

Douglas Benson
Upper Great Plains Transportation Institute, NDSU
701-231-8388
doug.benson@ndsu.edu

External Project Contact

Frank Dooley
Teaching Coordinator
Agricultural Economics
1145 Krannert
Purdue University
West Lafayette, IN 47907-1145
(765)494-4244 or Fax (765)494-9176
dooley@agecon.purdue.edu

Project Objective

Develop a stand-alone software program to provide truck cost information to reflect differences in equipment, product, and trip characteristics of an individual firm.

Secondly, provide additional performance measures for decision makers who use truck cost information. The different performance measures generated can be used by different entities for specific purposes.

Project Abstract

The motor carrier industry has been a recurrent subject for cost studies. All of the referenced studies use an economic-engineering approach to estimate trucking costs. The economic-engineering model estimates the production function with a given set of factor prices. Most studies use survey as a data collecting tool to arrive at costs by averaging information received from the survey. Cost components are easily identified in the economic-engineering approach and thus cost estimates of a new startup firm are readily available. A weakness of the economic-engineering approach is that the results are based on average values of input prices and resource usage. Thus, the results are accurate for a limited population. Furthermore, a new study must be under taken to update the results.

An Owner/Operator Spreadsheet Costing Model developed in 1996 has been useful however it is based on a spreadsheet and is not a stand alone model or software product. The model will be a stand-alone product that may be employed by transportation managers and researchers. The model will be expanded to include many truck configurations and also capture terminal and line haul costs.

Task Descriptions

• Task 1 – Review Current Literature on Truck Costing
• Task 2 – Update cost coefficients through personal interview and PPI applications
• Task 3 – Transform Costing Model into Visual Basic stand alone software
• Task 4 – Write a user manual for the software
• Task 5 – Write a final report including current literature, the model, some simulations sensitivity analysis, and report on the performance of the model.

Milestones, Dates

• Starting Date: September 1, 2000
• Project Milestones:
  • Task 1: October 30, 2000
  • Task 2: December 30, 2000
  • Task 3: April 15, 2001
  • Task 4: May 30, 2001
  • Task 5: July 1, 2001
• Ending Date: July 30, 2001

Yearly and Total Budget

Federal $35,000.00
University Match $14,350.00

Student Involvement

Some student involvement

Relationship to Other Research Projects

Building on previous research and provides a resource for other transportation research products.

Technology Transfer Activities

Tel8 presentation and public access on a web site.

Potential Benefits of the Project

Used by transportation managers, economic developers and in transportation research and other applications where truck costing is needed. May be used by private trucking firms for negotiation purposes, economic development decisions, location analysis, and other potential applications.

TRB Keywords

Motor carrier costs