Exploring the Use of Freight Exchange E-Marketplaces in Sweden: the Perspective of the Transport Service Provider by Andres Rios
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Exploring the Use of Freight Exchange E-marketplaces in Sweden: The Perspective of the Transport Service Provider by Andres Rios Supervisor: Henrik Sternberg Examiner: Klas Hjort Department of Service Management, Logistics SMMM20 – Spring 2018 Campus Helsingborg, Sweden 2018 Abstract A statistic released this year (2018) by the World Road Transport Organization shows that more than 80% of inland freight is moved by road. Frequent e-commerce activities and end-consumer demands on delivery performance have increased transport needs yet fill rates have decreased. Transport is less efficient and unsustainable while profit margins also shrink, motivating fiercer competition among service providers. Thus, the freight transport industry is fragmented; changes take place independently, with little effect on an aggregate level. The industry lacks a unified model; there are many actors with different relationships and decision-making managed in-house. This unstable and competitive environment has reached new heights through the internet and the benefits that come with access to information worldwide. Among other technologies, business models known as business-to-business (B2B) marketplaces, also called electronic marketplaces (e-marketplaces or EMs) emerged during the 90s. They provide inter-organization information connectivity, real time visibility, and flexible partnership configurations. Specifically, their main purpose is to bring shippers and carriers together to trade goods, services and information. Several researchers have pointed that this topic is relevant and little research has been done around it. This thesis addresses that research gap and presents an exploratory study on the use of EMs among transport providers in Sweden. Although EMs emerged a few years back, they continue to grow in importance and adoption among freight transport stakeholders. In like manner, they continue awakening interest from academia and industry due to their role as intermediaries among shippers and carriers. In this study, the perspective of the carrier (transport provider) is explored. Since the topic has not been previously explored through empirical studies, this research employs grounded theory (GT) as method to explore the topic. Further, the researcher employed interviews to access in-depth insight from the transport service providers (TSPs). Through a portfolio framework of analysis, the paper will explore the use e-marketplaces have among TSPs as well as identify the contextual factors that influence the use. The findings of this study contribute to academics and practitioners. This thesis brings to the attention of managers that the use of EMs among TSPs in Sweden is minimal, secondary and complementary to other options in a portfolio framework. Likewise, EMs are used to perform certain strategic tasks that no other supplier in the portfolio can provide: access to new markets, access to new geographic markets, access to lower-cost providers and capacity maximization among others. The study also contributes to academia, providing insight on e-marketplace use and conditions influencing it, shipper-TSP relationships, SC environmental dynamics and perspectives on portfolio creation of online tools. Keywords: e-marketplace, freight exchange, logistics, transport service provider, carrier, portfolio. i Acknowledgement In this section, I want to thank the people and organizations who helped me get to this point of closure in my master studies in Sweden. First of all, I want thank God as I am grateful for life and the opportunities He has allowed me to pursue in it; for the privilege to further my professional education in this amazing university and country. I would also like to dedicate this work to my parents as without their support I would have never made it to a postgraduate school. Their unconditional love and care has been my strength throughout the years. Additionally, I would like to thank my supervisor, Professor Henrik Sternberg, for his continuous guidance and support in this process. Thank you for sharing some of your experience and knowledge with me. Likewise, thank you, Professor Stephane Collignon, for providing guidance and supporting me in the development of this study by sharing your knowledge and experience. I would also like to thank the participating companies, specifically the people who willingly agreed to participate without hesitation. You allowed this research study to happen; without your participation this would have not been possible. Thanks for your time and trust in sharing your thoughts and experience. Last but not least, I want to thank the Swedish Institute for giving me the opportunity to achieve one of my personal goals, finishing my master’s degree. This research work marks the closure of an incredible two-year journey in Sweden thanks to the scholarship granted by SI. Thank you. Andres Rios Lund, May 22nd 2018 ii Contents Abstract .................................................................................................................................................... i Acknowledgement ................................................................................................................................... ii 1. Introduction ..................................................................................................................................... 1 1.1. Background ............................................................................................................................. 1 1.2. The Users ................................................................................................................................. 2 1.3. The Problem ............................................................................................................................ 2 1.4. Purpose & Research Questions ............................................................................................... 3 1.5. The Perspective ....................................................................................................................... 4 1.6. Structure of the Thesis ............................................................................................................. 4 2. E-marketplaces & The Freight Transport Industry .......................................................................... 6 2.1. Background on E-marketplaces ............................................................................................... 6 2.1.1. What is an E-marketplace? .................................................................................................... 7 2.1.2. E-marketplaces in a Portfolio: Additional Source of Supply ................................................ 9 2.1.3. Types of Freight Transport E-Marketplaces ........................................................................ 10 2.1.4. E-marketplace’s Success and Failure Determinants ............................................................ 12 2.2 Freight Transportation Industry ................................................................................................... 12 2.2.1. E-marketplaces and Brokerage in Freight Transport ........................................................... 14 2.2.2 Benefits of E-marketplace Use ............................................................................................. 15 2.2.3. Drawbacks of E-marketplace Use ....................................................................................... 15 2.2.4. Recommended Caution Measures for E-Marketplace Use .................................................. 16 2.2.5. The Freight Transport Sector in Scandinavia: Sweden ....................................................... 17 3. Methodology ................................................................................................................................. 20 3.1. The Literature Review ................................................................................................................ 20 3.1.1. The Research Process .......................................................................................................... 21 3.2. Grounded Theory ....................................................................................................................... 21 3.2.1. Glaserian & Straussian Approaches to Grounded Theory ................................................... 22 3.3. Data Collection ........................................................................................................................... 23 3.3.1. Semi-Structured Interviews ................................................................................................. 23 3.3.2. Sampling .............................................................................................................................. 24 3.4. Data Analysis ............................................................................................................................. 26 STEP 1: Open Coding ................................................................................................................... 27 STEP 2: Constant Comparison and Memo Writing ...................................................................... 28 STEP 3: Axial Coding ................................................................................................................... 29 STEP 4: Abstraction Process and Adoption of Core Categories ................................................... 29 STEP 5: Saturation and Diagramming .........................................................................................