Governance Structure in the Deregulated Trucking Industry

This paper uses a comprehensive survey of the entire U.S. trucking fleet to investigate patterns in the terms of trade between carriers and shippers during 1987 and 1992. Analysis of the 1992 data suggests that internal procurement and longterm contracts are used to alleviate hold-up problems associated with the use of specific trailers. The relationships between governance structure and measures of trailer specificity are weaker in the 1987 data. The empirical evidence indicates that changes in governance between 1987 and 1992 in part due to improvements in efficiency of contract carriage, especially for hauls using non-refrigerated vans. I propose that these improvements are attributable to long-run responses to regulatory reform and the availability of new technologies.