Shippers’ willingness to delegate modal control in freight transportation

Abstract

This paper investigates the willingness of shippers to delegate control over the transportation mode in freight transportation, using discrete choice analysis. Data originate from a large survey among global shippers. The results show that, under certain conditions, most shippers are willing to hand over mode selection authority to the service provider. Using latent class analysis, we classify shippers into four market segments, each with a different degree of willingness against different types of performance improvements. Firms can use this characterization of freight transportation demand to design service packages that will meet the demands of global supply chains.