A metafrontier analysis approach for assessing the efficiency of freight service providers

Abstract

This paper presents a DEA approach for a company to assess the efficiency of its shipments and of the haulers that handle them. It is based on the concept of metafrontier, which benchmarks a given shipment, first against all the shipments of the same hauler and then against all the shipments of all the haulers. Thus, the efficiency of each shipment as well as that of the corresponding hauler can be determined. The scale efficiency of the shipments, related to the cost premium paid for shipments whose weight, volume or distance is not large enough, is determined. In addition, the model estimates the functional dependence of the shipment cost on the load weight, volume and distance. An experimental design to validate the proposed efficiency assessment approach and test the factors that influence its accuracy has been carried out. The application of the proposed approach to a large Spanish food company is presented and used to illustrate its usefulness. The proposed approach is able to determine the minimum cost of a shipment as a function of its weight, volume and distance. This tool proved to be useful to assess the price quotes received by the company and bargain better prices.

KEYWORDS:

• Road freight
• shipment efficiency
• hauler efficiency
• DEA
• metafrontier analysis

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

Data are available under request to the authors.

Additional information

Funding

This research was carried out with the financial support of the Spanish Ministry of Science and Innovation, grant PID2021-123515NB-I00.

Notes on contributors

Belarmino Adenso-Díaz

Prof. Belarmino Adenso-Díaz is a professor of Operations Management at the Industrial Engineering School of the University of Oviedo in Spain. He worked for the Spanish National Steel Company for seven years, and has been a visiting professor at the Universities of Colorado and Michigan. He has authored four books, and published articles in scientific journals such as the Operations Research, Journal of Operations Management, Production and Operations Management, European Journal of Operational Research, International Journal of Production Research, Omega and IIE Transactions. He is the associate editor of Omega and the Journal of Heuristics.

Sebastián Lozano

Prof. Sebastian Lozano is Professor of Quantitative Methods in Management in the Department of Management at the University of Seville. He holds a Ph.D. from the University of Seville and a Master of Engineering in Industrial Management from the Katholieke Universiteit Leuven. He has published in different journals in the Management Science and Operations Research field such as the International Journal of Production Research, Robotics and Computer Integrated Manufacturing, Computers and Industrial Engineering, the Journal of the Operational Research Society, the European Journal of Operational Research, and Journal of Productivity Analysis. His main research interests are reverse logistics, closed-loop supply chains and performance/efficiency assessment including environmental impacts.