SHIPPERS’ TRANSPORT EFFICIENCY: THE BALANCE BETWEEN REQUIRED AND AVAILABLE CAPACITY
Paper in proceedings, 2015
Purpose: Improving the efficiency of freight transport leads to a reduction in both costs and emissions. One key aspect of efficient transport is the load factor, i.e., the load carried (required capacity) compared to the maximum load that could be carried (available capacity) in a load unit (e.g., a vehicle). Few existing articles discuss load factor from a shipper’s perspective. Also, the concept of load factor is interpreted in different ways, and there is confusion about what is 100% full. To achieve a high load factor can be seen as a balance between required and available capacity. As a step towards identifying opportunities for shippers to improve load factor, the purpose of this paper is to structure the load factor concept based on the balance between required and available capacity.
Research Approach: A conceptual model was developed based on the literature. This model was applied in the typical case of a shipper outsourcing freight transport. The data collection consisted of several semi-structured interviews with people in logistics and transport roles.
Findings and Originality: This paper presents a model that structures the concept of load factor based on required and available capacity, including load factor as the balance between required and available capacity at different levels. Further, required capacity for a particular time period is determined by order details, item characteristics, number of items and the consolidation of items in the load at each load factor level. Available capacity for a particular time period is determined by the type of load units and the number of load units at each load factor level. The different levels interact, and, to complement the balance at each load factor level, an overall measure comparing the required capacity at the lowest load factor level with the available capacity at the highest load factor level is suggested.
Research Impact: The conceptual model presented in this paper can be used to describe imbalances in shipper systems between required and available capacity. By providing structure and explaining inefficiency in terms of the imbalance between required and available capacity, the model is a step towards identifying opportunities for improving load factor. The findings are also of interest to researchers in the field of transport efficiency and green logistics.
Practical Impact: Logistics managers can achieve a better understanding of the concept of load factor and at what level their required and available capacity are imbalanced. Improving the load factor is of interest in terms of both reducing costs and improving environmental performance.