Method for analyzing profitability of freight load hauling operations

• US 6,604,081 B1
• Filed: 01/04/2000
• Issued: 08/05/2003
• Est. Priority Date: 01/04/2000
• Status: Expired due to Term

• Current Assignee: Southern Motor Carriers Association Inc.
• Original Assignee: Transportation Costing Group, Inc. (Southern Motor Carriers Rate Conference, Inc.)
• Inventors: Shults, William R., Manning, Kenneth M.
• Primary Examiner(s): CHILCOT, RICHARD E
• Application Number:
  US09/477,363
• Time in Patent Office: 1,309 Days
• Field of Search: 701/209, 701/117, 701/201, 701/210, 705/400, 705/7
• US Class Current: 705/7.37
• CPC Class Codes: G06Q 10/06316 Sequencing of tasks or work
• CPC Class Codes: G06Q 10/06375 Prediction of business process outcome or impact based on a proposed change
• CPC Class Codes: G06Q 10/08 Logistics, e.g. warehousing, loading or distribution; Inventory or stock management
• CPC Class Codes: G06Q 30/0283 Price estimation or determination

Abstract

The method allows for analyzing the profitability of each of two or more freight loads hauled by a freight-hauling vehicle while the vehicle travels through a round trip from a home location to a terminating location. The total cost associated with all of the freight loads carried during the round trip are apportioned among each of the freight loads based on the revenue contribution of the load, the total revenue from the round trip, the actual cost associated with the load, and the total cost of the round trip. A computer-readable medium is encoded with a plurality of processor-executable instruction sequences for analyzing the profitability of each of two or more freight loads hauled by a freight-hauling vehicle while the vehicle travels through a round trip from a home location to a terminating location.

Claims

1. A method for analyzing the profitability of each of two or more freight loads moved within a round trip of a freight vehicle during which the two or more freight loads are moved, one at a time, from one location along the round trip route to another location along the round trip route by the freight vehicle, said method comprising:

identifying a revenue contribution of each of the two or more freight loads of the round trip;

summing the revenue contributions of the two or more freight loads to obtain a total round trip revenue;

identifying a cost associated with each of the two or more freight loads of the round trip;

summing the costs associated with the two or more freight loads to obtain a total round trip cost; and

apportioning the total round trip cost among each of the two or more freight loads based on the revenue contribution of the freight load, the total round trip revenue, and the total round trip cost.

2. The method of claim 1, wherein said cost identification comprises:

identifying linehaul costs for each of the two or more freight loads, said linehaul costs comprising costs directly associated with operating the freight vehicle while moving the freight load from one location along the round .trip route to another location along the round trip route; and

identifying non-linehaul costs for each of the two or more freight loads, said non-linehaul costs comprising costs associated with the freight load but not directly related to operating the motor vehicle while moving the freight load.

3. The method of claim 2, wherein said revenue contribution identification comprises calculating a linehaul revenue contribution for each freight load by subtracting the non-linehaul costs associated with the freight load from the revenue contribution of the freight load, and said revenue contribution summation comprises summing the linehaul revenue contributions of the two or more freight loads to obtain total linehaul revenue.

4. The method of claim 2, further comprising:

identifying loaded miles for each of the two or more freight loads during which the freight vehicle moves the freight load from one location along the round trip route to another location along the round trip route;

identifying empty miles for the round trip during which the freight vehicle moves from one location along the round trip route to another location along the round trip route without moving any of the two or more freight loads;

allocating the empty miles among each of the two or more freight loads; and

adding the allocated empty miles for each of the two or more freight loads to the loaded miles for the freight load to obtain adjusted miles for the freight load,

wherein said linehaul cost of each of the two or more freight loads is determined based on the adjusted miles of the freight load.

5. The method of claim 4, wherein said empty miles allocation comprises:

summing the loaded miles of each freight load to obtain total round trip loaded miles;

calculating a ratio of the empty miles of the round trip to the total round trip loaded miles; and

calculating the adjusted miles for each freight load by adding to the loaded miles for that freight load the product of the loaded miles for that freight load and the ratio of empty miles to total round trip loaded miles.

6. The method of claim 3, said total round trip cost apportioning comprising:

calculating a relative revenue contribution for each of the two or more freight loads as a ratio of the linehaul revenue contribution for that freight load to the total linehaul revenue;

summing the linehaul costs for each freight load to obtain total linehaul costs;

calculating a relative cost contribution for each of the two or more freight loads as a ratio of the linehaul costs for that freight load to the total linehaul costs; and

comparing the relative revenue contribution for the freight load to the relative cost contribution for the freight load.

7. The method of claim 6, said total round trip cost apportioning further comprising:

calculating a load balance ratio for each freight load as 1 subtracted from the ratio of the relative revenue contribution for that freight load to the relative cost contribution for that freight load;

calculating a cost balance adjustment for each freight load as the product of the load balance ratio for that freight load and the linehaul cost for that freight load; and

calculating an adjusted cost for each freight load as the sum of the linehaul cost for that freight load, the cost balance adjustment for that freight load, and the non-linehaul cost for that freight load.

8. The method of claim 1, wherein the round trip is defined as a complete series of freight vehicle movements occurring from a time the freight vehicle leaves a designated home location until the freight vehicle returns to the home location.

9. A computer-readable medium encoded with a plurality of processor-executable instruction sequences for analyzing the profitability of each of two or more freight loads moved during a roundtrip of a freight vehicle during which the two or more freight loads are moved, one at a time, from one location along the trip route to another location along the trip route by the freight vehicle, said instruction sequences comprising:

identifying a revenue contribution of each of the two or more freight loads of the trip;

summing the revenue contributions of the two or more freight loads to obtain a total round trip revenue;

identifying a cost associated with each of the two or more freight loads of the trip;

summing the costs associated with the two or more freight loads to obtain a total round trip cost; and

apportioning the total round trip cost among each of the two or more freight loads based on the revenue contribution of the freight load, the total round trip revenue, and the total round trip cost.

10. The computer-readable medium of claim 9, wherein said instruction sequences for cost identification comprise:

identifying linehaul costs for each of the two or more freight loads, said linehaul costs comprising costs directly associated with operating the freight vehicle while moving the freight load from one location along the round trip route to another location along the round trip route; and

identifying non-linehaul costs for each of the two or more freight loads, said non-linehaul costs comprising costs associated with the freight load but not directly related to operating the motor vehicle while moving the freight load.

11. The computer-readable medium of claim 10, wherein said instruction sequences for revenue contribution identification comprise calculating a linehaul revenue contribution for each freight load by subtracting the non-linehaul costs associated with the freight load from the revenue contribution of the freight load, and said instruction sequence for revenue contribution summation comprises summing the linehaul revenue contributions of the two or more freight loads to obtain total linehaul revenue.

12. The computer-readable medium of claim 10, said instruction sequences further comprising:

identifying loaded miles for each of the two or more freight loads during which the freight vehicle moves the freight load from one location along the round trip route to another location along the round trip route;

identifying empty miles for the trip during which the freight vehicle moves from one location along the round trip route to another location along the round trip route without moving any of the two or more freight loads;

allocating the empty miles among each of the two or more freight loads; and

adding the allocated empty miles for each of the two or more freight loads to the loaded miles for the freight load to obtain adjusted miles for the freight load,

wherein said linehaul cost of each of the two or more freight loads is determined based on the adjusted miles of the freight load.

13. The computer-readable medium of claim 12, wherein said instruction sequences for empty miles allocation comprise:

summing the loaded miles of each freight load to obtain total round trip loaded miles;

calculating a ratio of the empty miles of the round trip to the total round trip loaded miles; and

calculating the adjusted miles for each freight load by adding to the loaded miles for that freight load the product of the loaded miles for that freight load and the ratio of empty miles to total round trip loaded miles.

14. The computer-readable medium of claim 11, said instruction sequences for total round trip cost apportioning comprising:

calculating a relative revenue contribution for each of the two or more freight loads as a ratio of the linehaul revenue contribution for that freight load to the total linehaul revenue;

summing the linehaul costs for each freight load to obtain total linehaul costs;

calculating a relative cost contribution for each of the two or more freight loads as a ratio of the linehaul costs for that freight load to the total linehaul costs; and

comparing the relative revenue contribution for that freight load to the relative cost contribution for that freight load.

15. The computer-readable medium of claim 14, said instruction sequences for total round trip cost apportioning further comprising:

calculating a load balance ratio for each freight load as 1 subtracted from the ratio of the relative revenue contribution for that freight load to the relative cost contribution for that freight load;

calculating a cost balance adjustment for each freight load as the product of the load balance ratio for that freight load and the linehaul cost for that freight load; and

calculating an adjusted cost for each freight load as the sum of the linehaul cost for that freight load, the cost balance adjustment for that freight load, and the non-linehaul cost for that freight load.