Exorcising ghost lanes from transportation procurement

This is an excerpt of the original article. It was written for the March-April 2023 edition of Supply Chain Management Review. The full article is available to current subscribers.

March-April 2023

In June 2013, Frank Quinn stepped down as the only editorial director Supply Chain Management Review had ever known. “In thinking about those whom I’m indebted to for the success of SCMR over 16 years, there is one constituency that must rank first on the list—you, the reader,” Frank wrote, as he handed over the reins to Bob Trebilcock. Now, Bob has done the same, handing over the reins to the next generation. I am very proud to be that next generation. In a farewell letter of sorts, Bob wrote that he was the “old” and I as the “new.” Nothing could be further from the truth. There is no old or new, only continuity. That continuity is…

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Ghost lanes are freight lanes contracted to motor carriers that are never used by the shippers that procure them. Research carried out at the MIT Center for Transportation & Logistics (MIT CTL) shows that contracting with carriers to move cargo that never materializes is far more prevalent than is widely assumed and exacts a surprisingly high price for both shippers and trucking companies.

We built a predictive model to identify which freight lanes are the most likely to yield very few or no loads, to estimate how much this outcome costs shippers, and to identify ways the industry can eliminate this profligate practice. Addressing the ghost lane issue may mean changing deep-seated behavior patterns.

Multiple pain points

We analyzed a large data set of shippers’ procurement outcomes and found that about 70% of the lanes procured in a given year end up as ghost lanes in that year. In other words, some 70% of the procurement process for motor freight—a complex process that can take many months to complete—was not needed.

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