Using a “virtual joint venture” to facilitate the adoption of intermodal transport

Abstract

Purpose – This paper aims to examine a strategic alliance between a large shipper and a freight forwarder to provide an intermodal service to and from the port of Gothenburg. The supply chain literature discusses various models of supply chain collaboration and integration. When applied to logistics, each has been shown to exhibit different levels of success depending on particular factors. Design/methodology/approach – The methodology is a single in-depth case paper based on action research, interviews and document analysis. Findings – According to this innovative model, a new entity is not set up but an open-book basis is established, long-term contracts with other parties are signed, risks and profits are shared and the shipper makes several investments specific to the service. Thus, the benefits of a joint venture are obtained without needing to establish a new organisation, thereby sacrificing flexibility and independence. Research limitations/implications – A limitation of this study is that it is based on a single case of best practice; it may be difficult to replicate the high levels of trust in other situations. Nevertheless, the evident success of this “virtual joint venture” suggests that some elements are transferable to other cases, and the model may be refined through additional case analysis. Practical implications – Results indicate several advantages of this “virtual joint venture” model, including risk sharing, knowledge development, long-term service stability and diversification of activities, which all contribute to facilitating the shift of a large customer from road haulage to intermodal transport. Potential challenges mainly relate to contractual complexity. Originality/value – This paper identifies an innovative business model for logistics integration that can be used in future in other cases to make modal shift more attractive and successful, which is a key aim of government policy in many countries.