LTL COSTING PROBLEM A shipment consistent of 20 cartons, each 6 cubic feet and weighing 100 lbs, was picked up from a manufacturer in Lexington, Kentucky. The shipment was one of three shipments being dispatched from the manufacturer's facility. The facility itself was one stop in a route including 10 others and covering a total of 50 miles. The driver began at 6:30 am and returned to the facility at 5:30 pm the same day. On arriving at the consolidation terminal, the shipment required 20 minutes to move from the pickup and delivery vehicle to the line-haul trailer. The line-haul tractor/trailer departed from the Lexington, Kentucky terminal at 10pm and arrived at a breakbulk terminal in Atlanta, Georgia (382 miles away) at 7am the following day. The shipment then took 15 minutes to move from the line-haul trailer to the delivery trailer. From the breakbulk terminal, the shipment was delivered to the receiver in Atlanta. This was one of 19 stops on the delivery route and the receiver accepted the shipment as one of five total. The delivery route ran from 10am to 6pm and covered a distance of 45 miles. All delivery vehicles and terminals are owned and operated by the LTL carrier. The tables below provide shipment and equipment information. Tractor Purchase Price Depreciation Interest (APR) Fuel Fuel Economy Labor Cost (PUD) Table 1: Pickup and Delivery Trailer $ 55,000 Purchase Price 5 years Depreciation 4% Interest (APR) $3.94/gal Weight Capacity 6 mp3 Volume Capacity $24/hr $ 35,000 5 years 4% 40,000 lbs 3,000 ft 7 years Tractor Purchase Price Depreciation Interest (APR) Fuel Fuel Economy Labor Cost (PUD) Table 2: Line-Haul Trailer $ 150,000 Purchase Price Depreciation 5% Interest (APR) $3.94/gal Weight Capacity 5 mpg Volume Capacity $24/hr $ 50,000 7 years 5% 44,000 lbs 3,500 ft Administrative Overhead Table 3: Additional Information 8% of total Billing cost of move $1.70 per freight bill $1 $1.50 Terminal Variable Cost (per shipment) Terminal Fixed Cost attributed to shipment PUD Maintenance $0.145/mile PUD Insurance $.055/mile LH Maintenance $.16/mile LH Insurance $.05/mile Dock Handler Labor $18/hr LTL COSTING PROBLEM A shipment consistent of 20 cartons, each 6 cubic feet and weighing 100 lbs, was picked up from a manufacturer in Lexington, Kentucky. The shipment was one of three shipments being dispatched from the manufacturer's facility. The facility itself was one stop in a route including 10 others and covering a total of 50 miles. The driver began at 6:30 am and returned to the facility at 5:30 pm the same day. On arriving at the consolidation terminal, the shipment required 20 minutes to move from the pickup and delivery vehicle to the line-haul trailer. The line-haul tractor/trailer departed from the Lexington, Kentucky terminal at 10pm and arrived at a breakbulk terminal in Atlanta, Georgia (382 miles away) at 7am the following day. The shipment then took 15 minutes to move from the line-haul trailer to the delivery trailer. From the breakbulk terminal, the shipment was delivered to the receiver in Atlanta. This was one of 19 stops on the delivery route and the receiver accepted the shipment as one of five total. The delivery route ran from 10am to 6pm and covered a distance of 45 miles. All delivery vehicles and terminals are owned and operated by the LTL carrier. The tables below provide shipment and equipment information. Tractor Purchase Price Depreciation Interest (APR) Fuel Fuel Economy Labor Cost (PUD) Table 1: Pickup and Delivery Trailer $ 55,000 Purchase Price 5 years Depreciation 4% Interest (APR) $3.94/gal Weight Capacity 6 mp3 Volume Capacity $24/hr $ 35,000 5 years 4% 40,000 lbs 3,000 ft 7 years Tractor Purchase Price Depreciation Interest (APR) Fuel Fuel Economy Labor Cost (PUD) Table 2: Line-Haul Trailer $ 150,000 Purchase Price Depreciation 5% Interest (APR) $3.94/gal Weight Capacity 5 mpg Volume Capacity $24/hr $ 50,000 7 years 5% 44,000 lbs 3,500 ft Administrative Overhead Table 3: Additional Information 8% of total Billing cost of move $1.70 per freight bill $1 $1.50 Terminal Variable Cost (per shipment) Terminal Fixed Cost attributed to shipment PUD Maintenance $0.145/mile PUD Insurance $.055/mile LH Maintenance $.16/mile LH Insurance $.05/mile Dock Handler Labor $18/hr
