Design and Development of a Business Model for Less Than Truck Load Freight Cooperation

Abstract

In times of globalized markets growing cutthroat competition compels companies to continuously identify new optimization potentials along their supply chain (Killich and Luczak, Unternehmenskooperation für kleine und mittelständische Unternehmen, p. V, 2003). In particular small and medium sized logistic service providers suffer from this development and lack the resources and geographical reach as well as the required quantities of customer shipments (Klaas-Wissing and Albers, Int J Logist Res Appl 13, p. 494, 2010).

Freight cooperation offers new alternatives for logistic service providers to assert their position against big competitors by bundling shipments of several participating logistic service providers and thereby, generating synergetic effects. Successful cooperation already exists in terms of general cargo and full truck load situations. Yet, in the case of Less than Truck Load shipments, no comparable solutions are available today. Usually not enough shipments with similar dispatch or receipt places exist, which leads to a small rate of return per truck (Tummel et al., Proceedings of the 3rd International Conference on Logistics and Transport & the 4th International Conference on Operations and Supply Chain Management, p. 2, 2011).

Hence, a suitable business model for a Less Than Truck Load freight cooperation is needed which is based on an IT-based central disposition, while in the meantime utilization rates are maximized and the number of empty runs is reduced (Bretzke, Logistische Netzwerke, p. 334, 2010). In addition, adequate fairness models and incentive concepts are fundamental requirements which have to be covered by the business model in order to overcome doubts of potential participants and to guarantee a successful cooperation.

In this paper we describe the development for a Less Than Truck Load business model, which is developed by the Project “Cloud Logistic” funded by the state North Rhine-Westphalia of the Federal Republic of Germany and by means of the European Regional Development Fund (ERDF). For the development we apply a combination of the Business Model Canvas (Osterwalder and Pigneur, Business Model Generation, p. 14, 2009) and a trend-based scenario technique, which enables us to create future scenarios and to derive action plans. Thereby, we establish a robust and sustainable business model for freight cooperation networks in the Less Than Truck Load segment.