An enhanced pricing model for truck transportation: a case study in Swedish forestry

Abstract Determining freight rates for heavy trucks involves a detailed analysis of multiple cost factors, including time, distance, fuel, and other operational costs, which collectively contribute to the overall compensation for transportation services. However, actual remuneration is based on more simplified agreements. Often, the standard agreement is based on the loaded driving distance. Such agreements provide an accurate description of the average cost over many transports but can be very unfair in compensation on single transports. This paper presents a pricing model for truck transportation that extends traditional models based on distance. The new model includes a measure of cost driving factors along the route, such as hills, road surface, curves, speed limits, intersections, speed changes, long ascents, and other physical difficulties. This measure is extracted from the Calibrated Route Finder, a route selection support system used for roundwood transportation in Sweden. The suggested price model that combines distance and a weighted resistance measure gives a better match between remuneration and full costing of a transport than a model that concentrates only on distance. The suggested model has been tested on a large annual transport data set and detailed and selected transportations evaluated by five large forest companies.