Productivity Growth in the U.S. Trucking Industry
Abstract
The performance of the trucking industry is very important to the economy given that it moves nearly 70 percent of the nation's freight (Tall et al. 2005). The more efficient and productive trucking fins are, the less the shipping costs are for the trucking firm managers and the end consumers or businesses. Consequently, it has become vital to keep the trucking industry running efficiently and continuing to improve productivity. Productivity change of 115 of the largest firms in the United States was determined for the years 1999 and 2003. The Malmquist Productivity Index was decomposed into technical efficiency change and technical change. Results showed that the trucking industry, on average, was technically inefficient in years 1999 and 2003, even though the trucking industry experienced productivity improvement during that period. There was evidence that, on average, technical change, instead of technical efficiency, contributed more to productivity growth in the U.S. trucking industry. The findings in this study point to technological innovation as the reason for positive productivity change. It has also been found that the industry has been rather technically inefficient. Trucking firms should embrace innovation and technology, and develop new strategies for delivery to improve productivity.