Contracts in the for-hire trucking industry are unusual in that, although they establish prices for different services, there is typically no legally binding obligation or penalty for either party to offer or accept a load. When a load is rejected by all contract carriers, shippers must turn to the spot market, which can significantly increase supply chain costs. Because these transactions occur between private parties, data on load acceptances/rejections and contract/spot prices have not been available to academic researchers, leaving the freight rejection problem largely unexplored. We are able to examine this problem using a detailed transactional data set of a large national shipper. We estimate that spot prices for truckload services average about 62% higher than contract rates. We find key operational and economic factors to be drivers of freight rejection and the shipper-carrier relationship to be a deterrent to freight rejection. We also find that primary and secondary carriers respond differently to these operational and economic factors. We discuss how these insights could be used by a shipper to get better performance and lower cost from their carrier base.
He is co-chairman and member of the Board of the E-Finance Lab, an industryacademic partnership between Frankfurt and Darmstadt Universities, and leading industry partners that include Deutsche Börse, IBM, DZ Bank, Finanz Informatik, and FactSet. He is a member of the Exchange Council of the Frankfurt Stock Exchange, and the Consultative Working Group of the Secondary Market Standing Committee of the European Securities and Markets Authority. His academic work focuses on digital finance and fintech, information systems in financial markets, market microstructure theory, regulatory impact on financial markets, and innovation in electronic trading systems. He serves as editor in chief of EFL Quarterly and associate editor of several other journals. His research publications have appeared in Journal of Business Economics, Journal of Information Technology, Decision Support Systems, European Financial Management, and many other journals, research monographs, and conference proceedings.
IT strategy, financial sector computerization, and compliance systems has been published in leading academic journals and has been cited in the Wall Street Journal and the Financial Times. his recent books are The Equity Trader Course (Wiley, 2006) and Mastering the Art of Equity Trading Through Simulation (Wiley, 2010). his work evaluates the economic advantages of digital markets, and highlights the new challenges facing traders, managers, and regulators in an increasingly computerized financial services industry.aBstraCt: New e-markets try in a number of ways to attract a critical mass of participation and usage. Two innovative, all-electronic options exchanges, the International Securities Exchange (ISE) and the Boston Options Exchange (BOX), opened for trading in 2000 and 2004. In contrast to rival floor markets, they offer immediate order execution, direct user access, and reduced costs. As a result, ISE and BOX grew trading volumes and won market share from four incumbent exchanges in the united States. We observe significant differences between broker order-routing practices across ISE and BOX, leading to the markets' different growth patterns. We develop and test hypotheses about new market growth using a panel of six years of quarterly disclosures from 24 major brokerage firms. We find that membership affiliations are Downloaded by [SUNY Health Science Center] at 16:08 23 March 2015 48 PArkEr AND WEBEr the dominant force in predicting brokers' order-routing patterns. In contrast to prior research, network externalities, as measured by an exchange's previous quarter market share, are not significant predictors after controlling for temporal heterogeneity. From our results, executives of new electronic exchanges should concentrate on developing broker exchange affiliation and incentive schemes in order to achieve sustainable order levels. Furthermore, keeping a keen eye on the competitive landscape and reacting to changes in current and prospective competitors' affiliation structures may prove the most beneficial way to ensure continued success. Top management must identify the relative advantages of new entrants' affiliation structures and respond accordingly. A new entrant that provides incentives through a novel affiliation structure can be routed significant orders if the incumbent exchange does not react swiftly and effectively. The results are not limited to analyzing electronic exchanges but, we expect, to many situations where competing information technology platforms also benefit from user affiliation and network effects.
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