MOTOR CARRIER COST FUNCTION COMPARISONS

The motor carrier industry has been thought of as a highly competitive industry. Most studies show that the industry lacks substantial scale economies and, in the absence of regulation, there are few barriers to entry and exit. Yet there is growing concentration in the less-than-truckload (LTL) sector of the industry. In this article, cost function comparisons are made of nine large, general commodity LTL carriers over the 1974 to 1988 period with and without adjustments for service quality differences.