Shipper-Carrier relationships and their effect on carrier performance

Abstract

The transportation function is critical to efficient and effective logistical operations. In order to improve transportation performance, it may be necessary for firms to form closer relationships with their carriers. Unfortunately, there are few studies examining the nuances and outcomes of shipper-carrier relationships. The focus of this work is to delineate the levels of relational closeness found between shippers and carriers and to assess the effects of relational closeness on carrier performance. Based on data and expertise provided by The Hershey Company, a major U.S. confectionary corporation, this research utilizes qualitative and quantitative techniques to accomplish these tasks. Findings indicate that closer relationships between shippers and carriers have no effect on carriers' on-time performance but significantly influence carriers' willingness to commit assets to the shipper and accept loads during times of constrained transportation capacity.