Competitiveness of Price in International Road Freight Transport

Abstract

Over the last 30 years, the competition in road transport has increased significantly. For a transport company to maintain its position in the road freight transport market, the knowledge of the accurate costs arising from the transportation process is an important tool in the current competitive struggle. Carriers quantify the transportation costs in the process of price creation using the routes utilization coefficient, also taking into account routes with an empty vehicle. The value is usually set as a constant in the range from 0 to 1. The purpose of this paper is to show that it is more appropriate and economically feasible to consider this as a variable which depends on the direction as well as on the time of the transportation. In this analysis, a twofactor ANOVA model was applied to actual data of transport offers to Slovakia from 18 different countries recorded on a daily basis in a period of one year. The analysis shows that the direction of transportation is a significant factor in the offer, and therefore it is appropriate to include this factor in the price creation. The results of this analysis are in practice directly applicable to modify the calculation procedures and thus gain a competitive advantage for the transport operator in calculating the transportation price. Using this methodology, the carrier can determine the price more accurately and achieve greater price competitiveness in road transport in the common EU market.