Guest Post: Location Factors Revisited–Trucking

Prof. Howard Weiss provides today’s guest post. Howard is the creator of the Excel OM and POM software that comes free with our text.

Bottlenecks cost the U.S. economy more than $42 billion in 2019, according to Federal Highway Administration data, and freight shipments suffered almost 660 million hours of delay on the nation’s roadways. Trucks experienced over 27 million days of delays with 1/3 occurring on interstates.

The American Transportation Research Institute (ATRI) has recently issued a report detailing the top 100 traffic bottlenecks in the U.S. based on GPS data from more than one million trucks at 300 specific locations. Figure 8.1 of your Heizer/Render/Munson textbook points out that one of the important site location factors is “air, rail, highway, and waterway systems” and Chapter 11 notes that “the vast majority of manufactured goods moves by truck” –which is 73% of the value of the freight. This makes the information in the ATRI report one of the critical factors when selecting a location and/or trying to reduce costs in the supply chain. The figure below shows the top 10 congestion sites in the report.

Of course, COVID has had a major effect on congestion. One study indicated that in February 2020 congestion increased due to panic-buying consumer demand. Another study showed that in March 2020 congestion decreased due to less volume of traffic on the road. On the other hand, congestion increased in 2020 because more road construction projects were able to begin and move at a faster pace due to the reduction in travel. Overall, truck speed was up 34% in 2020 compared to 2019.

Classroom Discussion Questions

1. Amazon has chosen to locate its HQ2 on the East Coast where there is a great deal of congestion. What reasons aside from transportation would lead Amazon to make this regional decision?
2. Does proximity to markets explain some of the reasons for the bottlenecks?