E-Commerce and the Changing Terms of Competition in the Trucking Industry: A Study Of Firm Level Responses To Changing Industry Structure

The integration of the internet into business activities is affecting the trucking industry both directly and indirectly. Direct influences involve changes in information brokerage in the highly fragmented trucking industry. Indirect influences arise as shippers and consignees, which are the customers of trucking firms, invoke demands for lower shipment prices, greater service quality, quicker delivery, critical service innovation, and greater logistics support. The internet has brought new firms into the trucking sector, which are using the information aggregation capabilities of the internet to create new business opportunities in a fragmented and geographically dispersed industry. At the same time, many incumbent firms in the trucking industry have responded to the internet environment both by attempting to become more efficient and by beginning to transform themselves to become vehicles of e-commerce. In this transformation, trucking industry incumbents are increasing the variety and customization of freight movement services that they offer their customers and are integrating their transportation and logistics services so as to provide one-stop shopping solutions. Traditional trucking firms are also exploring new opportunities in related transportation industries such as home delivery and package express. Rather than simply being “trucking companies” that transport goods between two points, the major players in the industry are becoming “asset-based transportation management” service providers that oversee a broad set of transportation services, many of which emphasize managing information rather than handling physical goods. In the dual process of attempting to become more efficient while also undertaking major business changes, the firms are seeking to both exploit existing skills and explore new opportunities that require new skills and organization. Evidence from a survey of trucking firms suggests that most firms are investing in internet technology for both exploitation and exploration objectives and, in the process, are re-organizing and restructuring in order to respond to the opportunities and challenges of the new economy.