One of Jim O$$Brien$$s customers has presented him with an opportunity for a significant

amount of freight moving into a new market for Hardee. Hardee is a truckload carrier

primarily moving freight in the East$/$West market in the United States. Although it has

some movements in and out of Canada and Mexico, Hardee has focused on moving freight

in eastward and westward directions. Hardee has dispatch centers located throughout the

United States, which have some dock capacity.

The new move would be between Pittsburgh and Miami. Hardee has avoided this market because of the lack of backhaul opportunities that exist outbound from Florida. However,

this new move offers a significant increase in volume for Hardee. A complicating factor in

this move is the request that Hardee perform sorting and segregation at its dispatch centers. Each shipment will consist of straight $($one product$)$ pallet loads of various types of

consumer goods freight destined for a retailer$$s distribution center in Miami. Sorting and

segregation at Hardee$$s locations would consist of breaking the pallets and sorting the freight

by the retailer$$s store locations, then repalletizing into rainbow $($mixed products$)$ pallets for

each store.

Hardee has never experienced this type of request before. Jim knows that he needs to

put some type of costs to this move to make sure that the moves are profitable. Because of

the large volume involved, not covering Hardee$$s costs in pricing could result in large losses

for Hardee. The relevant information for costing this move is as follows:

Equipment Cost Data

Equipment Purchase Price

$1.$ Line$-$haul tractors $5$ $$120,000$

$2.$ Line$-$haul trailers $5$ $$40,000$

Depreciation

$1.$ Tractors $55-$year straight line

$2.$ Trailers $58-$year straight line

Interest

$1.$ Tractors $56$ percent APR for $5$ years

$2.$ Trailers $56$ percent APR for $8$ years

Fuel

$1.$ $$3\mathrm{.}83$ per gallon for diesel

$2.$ Line$-$haul tractors $56\mathrm{.}0$ miles per gallon

Labor

$1.$ Line$-$haul drivers $5$ $$0\mathrm{.}45$ per mile

$2.$ Pickup and delivery $($PUD$)$ drivers $5$ $$30($fully loaded$)$ per hour

$3.$ Dock workers $5$ $$25($fully loaded$)$ per hour Miscellaneous

$1.$ Insurance cost $5$ $$0\mathrm{.}067$ per mile

$2.$ Maintenance cost $5$ $$0\mathrm{.}152$ per mile

$3.$ Billing cost $5$ $$1\mathrm{.}95$ per freight bill

$4.$ Tractors and trailers are available for use $24$ hours per day, $365$ days per year

$5.$ Administrative overhead cost $510$ percent of total cost of move

$6.$ Dock facility cost $5$ $$15$ per hour

$7.$ Line$-$haul vehicle averages $45$ mph between origin and destination

Route and Time of Move

The shipment $(45,000$ pounds$)$ originates at a customer location in Pittsburgh, located $20$

miles from Hardee$$s dispatch center. A PUD driver is dispatched from the Hardee location

at $8$:$30$ a$.$m$.$ on January $12,2015,$ and arrives at the destination at $9$:$00$ a$.$m$.$ the same day.

The shipment is loaded from $9$:$00$ a$.$m$.$ to $12$:$00$ p$.$m$.$ The PUD driver departs the customer

location at $12$:$00$ p$.$m$.$ and arrives back at the Hardee dispatch center at $12$:$30$ p$.$m$.$

The sort process starts at $12$:$30$ p$.$m$.$ and ends at $8$:$30$ p$.$m$.$ on January $12.$ It requires

unloading the trailer, sorting, and repalletizing the load. This operation requires two dock

workers, each working the same trailer for $8$ hours in the dispatch center.

The line$-$haul portion begins with the vehicle being dispatched from the Pittsburgh

location at $8$:$30$ p$.$m$.$ on January $12$ and traveling to Charlotte, North Carolina, a distance

of $481$ miles, and arriving at Charlotte at $7$:$12$ a$.$m$.$ on January $13.$ The driver rests from

$7$:$12$ a$.$m$.$ until $3$:$12$ p$.$m$.$ The trip continues with the vehicle departing Charlotte at $3$:$12$

p$.$m$.$ on January $13$ and traveling to Jacksonville, Florida, a distance of $399$ miles, arriving at

Jacksonville at $12$:$06$ a$.$m$.$ on January $14.$ The driver rests from $12$:$06$ a$.$m$.$ until $10$:$06$ a$.$m$.$

The line$-$haul portion concludes with the vehicle departing Jacksonville at $10$:$06$ a$.$m$.$ and

traveling to the customer$$s location in Miami, a distance of $369$ miles, and arriving at the

distribution center at $6$:$18$ p$.$m$.$ on January $14.$

The line$-$haul driver stays with the vehicle while it is being unloaded $(2$ hours unload

time$).$ The driver then deadheads at $8$:$18$ p$.$m$.$ from the customer$$s distribution center and

arrives at a Hardee dispatch center located in Miami at $8$:$48$ p$.$m$.,$ a distance of $15$ miles from

the distribution center $1.$ What are the pickup, sort, line$-$haul, and delivery costs to Hardee for this move?

$2.$ What is the total cost of this move? Cost per cwt$?$ Cost per revenue mile?