Great expectations or paper rates?

The term “paper rates” is getting a fresh look with recent research by researchers from the MIT Center for Transportation & Logistics. Angela Acocella, Chris Caplice and Yossi Sheffi divided into how shippers, carriers and market dynamics play into freight contract performance. The recently released paper defines this relationship interplay as a buyer-supplier relationship. To translate this into trucking terms, the buyer refers to a shipper who is buying transportation capacity from a seller, which is either an asset-based carrier or a third-party brokerage that buys capacity from other asset-based carriers.

Current research on shipper-carrier relationships shows that more frequent interactions, longer relationships, and consistency in either sending agreed upon volumes or accepting those tender volumes predict better service. What the report notes and examines is what happens to those relationships when market characteristics change, and if external factors can change those relationships. The report notes that this is new territory, as little research exists on impacts from the latter.