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.

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