Information, Decisions, and Productivity: On-Board Computers and Capacity Utilization in Trucking

Productivity reflects not only how efficiently inputs are transformed into outputs, but also how well information is applied to resource allocation decisions. This paper examines how information technology has affected capacity utilization in the trucking industry. Estimates for 1997 indicate that advanced on-board computers (OBCs) have increased capacity utilization among adopting trucks by 13 percent. These increases are higher than for 1992, suggesting lags in the returns to adoption, and are highly skewed across hauls. The 1997 estimates imply that OBCs have enabled 3-percent higher capacity utilization in the industry, which translates to billions of dollars of annual benefits.