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A Comparison of Contract Types for Procuring Trucking Services: A Case Study of A Large Swedish Retailer

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  • Johan F. Lundin
  • Leyla Hedberg

Abstract

We found that a large Swedish grocery retailer was missing a structured approach for deciding on contract type when procuring trucking services in shipper‐forwarder relationships. In this context, we identified four contract types: dedicated services, periodical services, truckload services, and less‐than‐truckload services. From previous literature, we found that trucking costs, utilization, and coordination costs impacted prices when tendering for trucking services. Thus, the purpose of this article is to compare the four contract types for trucking services based on trucking service costs, which includes a tradeoff between utilization and coordination costs. Using an applied research project, we worked together with the grocery retailer to compare contract types. Our results show that it is possible to compare contract type using trucking costs, utilization, and coordination costs associated with each contract type.

Suggested Citation

  • Johan F. Lundin & Leyla Hedberg, 2012. "A Comparison of Contract Types for Procuring Trucking Services: A Case Study of A Large Swedish Retailer," Transportation Journal, John Wiley & Sons, vol. 51(2), pages 238-255, April.
    • Handle: RePEc:wly:transj:v:51:y:2012:i:2:p:238-255
    DOI: 10.5325/transportationj.51.2.0238
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    References listed on IDEAS

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    3. Hubbard, Thomas N, 2001. "Contractual Form and Market Thickness in Trucking," RAND Journal of Economics, The RAND Corporation, vol. 32(2), pages 369-386, Summer.
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    6. De Vany, A S & Saving, T R, 1980. "Competition and Value of Service Pricing in the Trucking Industry: Reply," American Economic Review, American Economic Association, vol. 70(1), pages 181-185, March.
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