Valuation of freight transportation contracts under uncertainty

Tsai, Mei-Ting; Saphores, Jean-Daniel; Regan, Amelia

doi:10.1016/j.tre.2011.03.005

Cited by 39 publications

(27 citation statements)

References 9 publications

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“…Tsai et al. () find no published papers, academic or otherwise, that analyze actual spot transactions in FHTL, and Scott () and Scott et al. () appear to be the only papers to study this market since.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

Carrier Bidding Behavior in Truckload Spot Auctions

Scott

2018

J of Business Logistics

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W hen a shipper urgently needs truckload service, they often utilize the spot market. But despite its importance, little is known about this market. I analyze a longitudinal data set of auctions for spot truckload service where I observe invitations for carriers to bid, whether a bid is placed, and the bid price if one is placed, and augment this with information about the bidding carriers. Drawing upon auction theory, I suggest that a carrier's a priori characteristics (size, market specialization) explain the two primary decisions made in the auctions-whether to bid and how much to bid. I find that brokers, who act as intermediaries between shippers and asset-based carriers, bid much more frequently and higher than asset-based carriers. Price indexes show that broker bid prices follow similar patterns, but asset-based carrier prices do not. The results suggest that an online marketplace linking shippers directly with the thousands of asset-based carriers could add considerable value to the for-hire trucking industry, a development which appears to be happening.

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Section: Hypothesis Developmentmentioning

confidence: 99%

Carrier Bidding Behavior in Truckload Spot Auctions

Scott

2018

J of Business Logistics

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“…A different perspective on transportation problems under uncertainty is considered by Tsai et al (2011), who consider a transportation problem with uncertainty in the transportation capacities and costs. Lium et al (2009) find consolidation as a way to hedge against uncertain demand in a multi-commodity stochastic service network design model.…”

Section: And the References Therein)mentioning

confidence: 99%

A two-stage stochastic transportation problem with fixed handling costs and a priori selection of the distribution channels

Hinojosa

Puerto

Saldanha-da-Gama

2014

TOP

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In this paper, a transportation problem comprising stochastic demands, fixed handling costs at the origins, and fixed costs associated with the links is addressed. It is assumed that uncertainty is adequately captured via a finite set of scenarios. The problem is formulated as a two-stage stochastic program. The goal is to minimize the total cost associated with the selected links plus the expected transportation and fixed handling costs. A prototype problem is initially presented which is then progressively extended to accommodate capacities at the origins and multiple commodities. The results of an extensive set of computational tests are reported and discussed.

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“…The penalty for early termination of a lease was discussed in this study as well. Tsai et al (2011) attempted to hedge the uncertainties in transportation capacity by creating truckload options.…”

Section: Real Options Embedded In Lease Contractsmentioning

confidence: 99%

Double-sided price adjustment flexibility with a preemptive right to exercise

Sharif

Qin

2014

Ann Oper Res

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This paper proposes a double-sided flexibility in adjusting the lease price as an alternative, more accessible tool for managing revenues or controlling costs in volatile markets. The double-sided flexibility addresses the dilemma of allowing only one party of a lease contract to have the price adjustment flexibility while both parties want it. Although the proposed clause grants both contract parties the right to adjust the lease price for one time during the contract life, one party can enjoy superior flexibility over the counterparty by buying a preemptive right to exercise it. The paper models the double-sided flexibility as sequentially compounded real options and optimizes the exercise decision for each option owner. The proposed flexibility clause is embedded in time charter contracts in the maritime transport industry to illustrate the effectiveness of it in helping manage the price risk of lease contracts.

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Valuation of freight transportation contracts under uncertainty

Cited by 39 publications

References 9 publications

Carrier Bidding Behavior in Truckload Spot Auctions

Carrier Bidding Behavior in Truckload Spot Auctions

A two-stage stochastic transportation problem with fixed handling costs and a priori selection of the distribution channels

Double-sided price adjustment flexibility with a preemptive right to exercise

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