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AND BACKGROUND Over the last twenty years, the environment of the U.S. motor carrier industry has changed dramatically (Feitler, Corsi, and Grimm, 1997). Deregulation has been a troublesome event for many in the motor carrier industry as noted by an increase in the number of bankruptcies since deregulation was officially enacted in 1980 (Corsi, Grimm, Smith, and Smith, 1991; Feitler, Corsi, and Grimm, 1998). The free marketplace increased intramodal competition and placed downward pressure on prices, increasing failure rates and changing the strategic focus of many carriers (Silverman, Nickerson, and Freeman, 1997). Couple this with industry consolidation, rising insurance costs, driver turnover, large fluctuations in fuel prices, and a less than robust economy, and carriers are faced with a very difficult operating environment (Ellinger, Lynch and Hansen, 2003; Mejza, Barnard, Corsi, and Keane 2003). Clearly the large company segment of the industry is under pressure. At the same time shippers are reducing supply bases and asking their remaining logistics providers for higher service levels at competitive prices. Studies confirm that carriers are increasing the variety of services they offer and are attempting to enhance service quality in order to either gain a competitive advantage or merely survive (Crum and Allen 1991; Stock 1988). In part, carriers are making major adjustments to their strategic orientation to counteract the impact the rapid growth of "integrated logistics service providers" has had on the marketplace. While many motor carriers have made major adjustments to remain competitive in the challenging market environment (Corsi, Grimm, Smith, and Smith, 1991), one area where many continue to struggle is with the acquisition of new equipment. Asset based trucking companies depend on their tractors and trailers to move the freight that generates their revenue. Therefore, it is critical that these companies manage the acquisition, maintenance, and disposition of the equipment in an optimal manner. The entire lifecycle of the equipment must be managed in a way that maximizes reliability and minimizes cost. However, the effective management of capital assets has proven to be a difficult task for many in the highly competitive motor carriage industry. One approach with promise as a tool designed to aid carriers in the effective management of capital equipment is life-cycle costing. Life-cycle costing is an analytical system that examines how much it actually costs an organization to acquire, use, maintain, and dispose of an asset over its lifetime (Ellram and Siferd, 1993). This method of cost analysis tends to focus primarily on capital or fixed assets (Fernandez, 1990; Jackson and Ostrom, 1980). PURPOSE OF THE RESEARCH Motor carriers can range from a one truck operation to an international corporation with thousands of tractors and drivers and millions of dollars tied up in assets. Furthermore, carriers operate in a wide range of diverse markets. However, all asset-based carriers have one challenge in common, how to best acquire and utilize their equipment. Therefore, the purpose of this article is to identify opportunities for motor carriers to improve their competitive position through better life-cycle management. Data collected from public sources and personal interviews are analyzed to postulate strategies for improved carrier asset management. The first section provides information on study participants, research methodology, and introduces the strategic profit model. This model is used to provide support for the four strategies introduced in the research. Section two describes life-cycle management in general terms and how its concepts can be applied to managing equipment acquisitions. The third section addresses how asset assignment based on work configurations can impact the maintenance program and improve carrier performance and profitability. …

Using life-cycle costing and the strategic profit model to enhance motor carrier capital equipment management