Estimating and benchmarking Less-than-Truckload market rates

In this paper, we present a regression-based methodology that can estimate the Less-than-Truckload (LTL) market rates with high reliability using an extensive database of historical shipments from continental United States. Our model successfully combines the quantitative data with qualitative market knowledge to produce better LTL market rate estimates which can be used in benchmarking studies allowing carriers and shippers to identify cost saving opportunities. We identify the main drivers of LTL pricing and reveal the effects of certain industry practices on the final market rates.