Agency decision making in freight distribution chains: Establishing a parsimonious empirical framework from alternative behavioural structures

In designing an approach to parameterise the preferences of agents in a distribution chain for retail goods, Hensher and Puckett [Hensher, D.A., Puckett, S.M., 2007. Theoretical and conceptual frameworks for studying agent interaction and choice revelation in transportation studies. International Journal of Transport Economics XXXIV (1), 17–47] set out a general framework in which two or more agents negotiate a contractual arrangement to provide distribution services. In developing a framework to guide the empirical study, recognition of the difficulty in sourcing agent pairs is a major challenge and one that entails some amount of practical compromise. In this paper we present a new conceptual framework capable of capturing, through ideas of concession and power, without explicit interaction between agents, the interactive element of choice and show how we implement this to deliver an empirical method that is tractable in terms of securing an adequate sample as well as being cost effective. We find that transporters appear to hold strong relative power with respect to on-time reliability and variable charges, regardless of the degree of concession offered by either type of decision maker; whereas shippers’ preferences appear to dominate the supply chain response to policy measures influencing transit time. Importantly both transporters and shippers do have a significant role to play in the formation of distribution chain preferences.