Organisation of multilateral LTL alliances

Abstract

In the less-than-truckload (LTL) market, alliances of smaller logistics service providers successfully compete with large, integrated logistics corporations. However, such alliances are often seen as an inferior governance mode in terms of establishing and operating cost-efficient production structures. Because little is known about the organisation of such multilateral LTL alliances, this paper conceptualises and explores their cooperative organisation and offers tentative explanations for their specific organisational design. Two in-depth cases have made it possible to analyse the specific organisational arrangements of two successful but contrasting German LTL alliances. The findings shed light on LTL alliance design alternatives and their effectiveness conditions and can serve as a guideline for alliance evaluation and design in the LTL business.

Horizontal collaborative transport: survey of solutions and practical implementation issues

“…To overcome the latter, some organisational concepts have been proposed. For carrier collaboration (S2 for example), a limited liability company (LLC) is usually formed to organise and manage an alliance (or a coalition) (Albers and Klaas-Wissing 2012). LLC can be economically independent (owned by someone outside the alliance) or dependent (owned by the partners in the alliance).…”

Effective logistics alliance design and management

“…Business certainly is not static; you cannot assume relationships will be either" (Daugherty, 2011: 24). However, the logistics industry is dynamic, with some alliances operating for more than a decade and others collapsing even before they begin operations (Albers and Klaas-Wissing, 2012). However, only a few studies of vertical alliances have pointed to the need for alliance transformation over time by referring to a firm's specific strategic (Fawcett et al, 2008) or operational capabilities (Bhatnagar and Viswanathan, 2000;Tate, 1996) of a firm.…”

Horizontal collaboration in the freight transport sector: barrier and decision-making frameworks

“…• A strategic alliance is a CTN based on a long-term partnership and contractual agreements among companies [7]. For example, transport alliances might be formed by a group of small carriers to achieve economies of scale through serving transport demands from many small shippers or a few large shippers [23]. The formation of transport alliances requires making strategic decisions (e.g., partner selection), tactical decisions (e.g., cost and profit sharing), and operational decisions (e.g., collaborative vehicle routing and order sharing decisions).…”

“…Multiple studies showed that whenever resources are financed by partners, this ensures the commitment and support of the partners to make the CTN successful [10,52]. In large alliances, transport resources and assets are owned by partners while CDSSs, marketing, central management costs are financed by profits or transactional fees from the daily business in the CTN [23]. For example, the leading CTN 'Transplace' was founded in 2000 by six large freight carriers, each of which contributed $5 million in the funding of the CTN [33].…”

“…Revenues are generated from payments by the partners according to the following: membership fees, per-transaction fees, profit-sharing ratio, subscription-based fees, software license fees, and Ad-based fees. These methods can be employed individually or in a combined manner [16,23,45]. A membership fee is paid by a partner to enter the CTN alliance.…”