Stability of Multi-Part Pricing in the U.S. Less-Than-Truckload Industry: Evidence From the Panel Stationarity Test With Structural Breaks
Keywords:
business, economics, freight, pricing, less-than-truckload, fuel surcharge, structural break, stationarityAbstract
This paper aims to examine the stationarity of LTL carriers’ multi-part pricing structures. We construct a spillover index of inter-firm linkages among base yield, fuel surcharge, and total yield (measured by fuel surcharge plus base yield), and use a heterogenous panel stationarity test developed by Hadri and Rao (2008) to allow for structural breaks. After accounting for cross-sectional dependence, results indicate that a structural break occurred in all three revenue dimensions but with quite different break patterns, since the inter-firm price structure gap has narrowed and converged toward the industry average. In short, competition has intensified in the LTL industry.
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