Modeling Contractual Relationships in Transport

Within a supply chain, the firms that need to shift goods downstream usually buy transportation services from a third party. This transport supplier thus becomes part of the supply chain. The process of organizing these movements come under the heading of logistics. It is through logistics and Supply Chain Management that the twin goals of cost reduction and service enhancement can be achieved. It is commonly observable that a carrier and a shipper may not always be setting up the best contractual framework for their future interaction.

Secondly, the market through which they may eventually take recourse to satisfy their needs may not provide the required transparency or efficiency.

This particular research project centres on the workings of the relationship between users and providers of transport services. The first objective is to advance scientific research in the models of shipper-carrier commercial relationships. To do so, the tools developed in literature are applied in suitably modified ways so as to bring forth results that are distinctly applicable to an area which is more akin to logistics management.

The second object of this thesis is to contribute to the actual management practice of both shippers and carriers by providing evaluation tools to help management decision-making. To do so, the models also reflect actual practice of managers: information they lack, risk they face, limited planning horizon for the contracts they wish to enter, etc.