infonet-economy

In the less than full truck load (LTL) freight market, integrated transport companies compete head-on with multilateral horizontal alliance networks of smaller LTL service providers: the LTL population is characterised by a dichotomy of cooperative and corporate governance modes. In this paper, we identify the strategic management challenges of LTL networks and analyse the suitability of the two alternative governance modes to respond to these challenges. The analysis reveals a framework which allows the systematic exploration of LTL networks from an institutional perspective. It shows the contingent effects of governance on the strategic decision fields of LTL networks. Integrated transportation companies are more efficient regarding decision-making and network configuration at the expense of potential disadvantages concerning capital resources, narrow-mindedness, bureaucratic tendencies and detachment from the customer. Transportation alliances benefit from innovative strategic initiatives and close customer relations, but suffer from potential incompatibilities of alliance partners and inefficiencies regarding strategic decision-making and network configuration.