This study measures technical efficiency, scale efficiency and X-inefficiency of TL(truckload) carriers and LTL(less-than-truckload) carriers using cost function, and examins that what kind of effects have road and freight terminal on technical ineffi...
This study measures technical efficiency, scale efficiency and X-inefficiency of TL(truckload) carriers and LTL(less-than-truckload) carriers using cost function, and examins that what kind of effects have road and freight terminal on technical inefficieny. Its major findings are as follows: In TL carriers, firm 8 and small scale firm show high level in technical efficiency and X-efficiency. So output/input or minimized-cost/actual-cost ratio of firm 8 and small scale firm is larger than that of other firms. Notwithstanding high level in technical efficiency and X-efficiency, firms 8 and small scale firm`s scale efficiency is smaller than that of other firms. This matter is caused by relative revenue decrease according to freight dumping through excessive competition, operation with loss on cost, overburden etc., and not by cost increase by over input of labour, capital, etc., However, in LTL carriers, firm 5 maintains high level in technical efficiency, scale efficiency and X-efficiency. So, in efficiency pattern, technical efficiency(or X-efficiency) and scale efficiency are contrary to each other in TL carriers, but in LTL carriers, technical efficiency, scale efficiency and X-efficiency are centered upon firm 5. As a result, it is necessary for firm 8 and small scale firm in TL carriers to reduce freight dumping and make the most of high level in technical efficiency and X-efficiency. However, LTL carriers, which show high level in technical efficiency, scale efficiency and X-efficiency in firm 5, must make counterplan to utilize economies of scale in spite of internally and externally insufficient conditions in trucking operation. If these conditions are improved, LTL carriers`s efficiency pattern will change greatly. And above facts become clear from next technical inefficiency`s feature through road and freight terminal. Technical inefficiency is related to road in TL carriers, but in LTL carriers, technical inefficiency is affected by freight terminal.