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In the for-hire truckload market, firms often experience unexpectedtransportation cost increases due to contracted transportation service provider(carrier) load rejections. The dominant procurement strategy results inlong-term, fixed-price contracts that become obsolete as transportationproviders' networks change and freight markets fluctuate between times of overand under supply. We build behavioral models of the contracted carrier's loadacceptance decision under two distinct freight market conditions based onempirical load transaction data. With the results, we quantify carriers'likelihood of sticking to the contract as their best known alternative pricedload options increase and become more attractive; in other words, carriers'contract price stickiness. Finally, we explore carriers' contract pricestickiness for different lane, freight, and carrier segments and offer insightsfor shippers to identify where they can expect to see substantial improvementin contracted carrier load acceptance as they consider alternative,market-based pricing strategies.

The end of 'set it and forget it' pricing? Opportunities for market-based freight contracts