Electronic transportation marketplaces: a transaction cost perspective

Electronic transportation marketplaces (ETMs) are Internet-based mechanisms that match buyers and sellers of transportation services. With claims of reducing the administrative costs of transportation procurement to virtually nothing, the allure of ETMs is considerable. Shippers (transportation buye...

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Bibliographic Details
Published in:Industrial marketing management 2003-04, Vol.32 (3), p.187-198
Main Authors: Goldsby, Thomas J., Eckert, James A.
Format: Article
Language:English
Subjects:
Advantages
Business to business commerce
Business-to-business
Costs
Economics
Electronic procurement
Electronic transportation marketplace
Internet
Transaction cost economics
Transportation industry
Transportation services
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Summary:Electronic transportation marketplaces (ETMs) are Internet-based mechanisms that match buyers and sellers of transportation services. With claims of reducing the administrative costs of transportation procurement to virtually nothing, the allure of ETMs is considerable. Shippers (transportation buyers) must therefore determine whether to pursue the new-founded opportunity and buy transportation services through an Internet-based intermediary or to buy services in a traditional manner. To date, there has been little structured thought on the topic to guide managers. Transaction cost economics (TCE) provides a robust framework toward this end. The TCE framework is adapted to present the procurement decision as one of “make” versus “buy.” The analysis is designed to help firms navigate their own determination to use an ETM and, when considered, the most appropriate form of ETM. The merits and caveats of ETM adoption are presented in the article.
ISSN:0019-8501
1873-2062
DOI:10.1016/S0019-8501(02)00262-6