Contract designs in the German piggyback transport industry : a transaction cost economics analysis

Doerr, Uwe (2001) Contract designs in the German piggyback transport industry : a transaction cost economics analysis. Doctoral thesis, London Guildhall University.


The liberalisation of transport capacities and prices of land-based transport of goods in Europe in the 1990s led to an increasingly market-orientated decision process for the users of piggyback transport services. However, the empirical research has not yet examined the contracts co-ordinating German piggyback transport chains in this changed environment.

This analysis seeks to explain the four types of contracts most commonly used in German piggyback transport by relating them to the theory of transaction cost economics (TCE). The qualitative case study approach adopted here derives from the tradition of Oliver Williamson’s research.

The hypothesis of the thesis relates the different contract designs to the type of transport service: the higher the specificity of an asset to fulfil the transport service required by the freight forwarder, the higher the tendency to vertically integrate piggyback transport services. Put differently, the following question is answered: ‘do the contracts used by freight forwarders to acquire the transport service of rail operators result in the lowest transaction costs o f the existing contracts for the specific haulage requested?’

The thesis models these transaction attributes o f the rail transport services for piggyback according to TCE and subsequently assigns them to the contract design elements o f the four types o f contracts. The first two contracts are efficient in all transport services they co-ordinate and the third is efficient to a large extent in terms o f the volume o f services co-ordinated. The fourth contract type cannot currently be designed in a way efficient for TCE.

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