Stakeholder Involvement in Integrated Passenger and Freight
Transportation: An Exploratory Study in the Netherlands
CHRIS M. SIKKES
Student number: 1922238
C.M.Sikkes@student.rug.nl
July 23, 2014
Abstract:
Keywords: Stakeholder analysis; rural areas; passenger transportation; freight transportation;
network coordination; sustainability; collaboration.
Supervising University:
University of Groningen
Supported by:
Stakeholder Involvement in Integrated Passenger and Freight Transportation:
An Exploratory Study in the Netherlands
Master thesis: MSc Supply Chain Management [AACSB Accredited]
Faculty of Economics and Business, University of Groningen, Groningen, The Netherlands
Supervisors: Prof. dr. I.F.A. Vis
Drs. M. Veenstra
1. Introduction
Recent reports (PBL1, 2011; TTK2, 2009) show a continuing decline in the population of rural areas
specifically in the Northern part of the Netherlands. Despite the decline in population, the remaining citizens in rural areas still need to be serviced with freight deliveries. From a business perspective this means the same logistical trips need to be made to serve this minority, only with less freight to average out the costs. From a customer point of view, the population decline has consequences for the number of services that remain available. Only recently, the largest postal company in the Netherlands applied for closure of 60 per cent of its parcel service points (Postumus, 2014). It is an illustrative example of services disappearing in rural areas as a result of the declining population. Troubling developments for rural areas that affect citizens and businesses in both the freight and passenger transportation service.
Rural area decline threatens the operational efficiency and environmental performance of freight transportation services. Craig et al. (2013) define environmental performance as the ability to minimize the carbon footprint of freight transportation between the origin and destination. In order for freight carriers to maintain their environmental performance level, distance needs to be compensated by a sufficient freight density (Craig et al., 2013). Freight consolidation is considered to be an effective approach for carriers to achieve sufficient freight density and to reduce transportation costs with economies of scale (Campbell, 1990; Zhou et al., 2011). However, with freight density declining and customers expecting next day delivery more often, freight accumulation in rural area delivery has become exceptionally difficult. This implies that time has become a key operational factor (Hernández et al., 2011), with freight carriers obligated to deliver shipments within an agreed timeframe. Improving the distance and freight density ratio in rural area transportation is therefore difficult to achieve. Serving a minor population with smaller freight volumes makes freight transportation overly expensive and leaves a negative footprint on the environment behind. Finding the balance to act efficiently and sustainable in rural areas has become a challenge for carriers. Current approaches steer towards consolidation efforts and optimising less than truckload operations (Mesa-Arango and Ukkusuri, 2013). However, with freight performance inextricably linked to the population size and freight density, the options to improve economic and environmental performance in rural areas are limited for carriers.
The impact of the declining population in rural areas in the Netherlands is not only experienced in freight transportation. In passenger transportation systems the ratio between distance travelled and passenger counts raise concerns. Urban areas are in general privileged with higher passenger counts and shorter travel distances compared to rural areas (KiM3, 2010). In contrast, rural areas are confronted with a smaller
passenger count while facing larger distances to cross. These demographic and geographic conditions indicate that the effects of population decline are experienced in passenger transportation as well. Economic costs and the average environmental footprint per passenger raise concerns. Ride sharing initiatives emerge to improve efficiency by increasing the trip volume (Cepolina and Farina, 2012). Current initiatives in rural passenger transportation are found in an ad-hoc taxi service, where passengers send in a request for door-to-door travel (KiM, 2010). Unfortunately, such initiatives are focussed at individual travellers and do not provide a solution for train and bus transportation in rural areas. Because of the declining population in rural areas, thebus and train providers face lower passenger counts, which constrains them to operate efficiently. In theory, transportation providers could consider reducing the trip frequency, i.e. number of trips from origin to destination, to maintain acceptable utilization levels. Unfortunately their options are limited, since tendering agreements in the Netherlands, inhibit adjustments to be made freely (Veeneman et al., 2008).
1 PBL Netherlands: Environmental Assessment Agency.
2 Topteam Krimp Netherlands: Knowledge Institute.
Besides, reducing the trip frequency of a public service is negatively perceived by passengers and compromises their satisfaction levels (KPVV4: 2013), therefore questioning the effectiveness of such a solution
in the first place.
It is evident that passenger- and freight transportation in rural areas are under severe economic and environmental pressure. Individual initiatives are undertaken, but with the population decline continuing in the years to come (PBL, 2011), the need for smart collaborative solutions to counteract the concerns remains. This paper suggest an innovative transportation solution is found in integrating passengers and freight transportation networks into a network further referred to as an ‘Integrated Passenger and Freight’ (IPF) network.
Collaboration within an integrated network is inevitable. The intent to share resources with others in the network depends largely on mutual benefits. Finley and Srikanth (2005) expressed the importance of collaborative efforts in order to achieve performance improvement. Without benefits the collaboration is unlikely to succeed. In practice, cost- and profit sharing agreements between carriers could be a clear example of horizontal collaboration, while sharing information with the community is linked to vertical collaboration. Logistical performance is positively influenced by the outcomes of collaboration (Stank et al., 2001; Mason et al., 2007). Such performance improvements can be measured by reducing costs, increasing asset utilization and improving service levels (Esper, 2003). Although positive effects have been acknowledged, collaborative initiatives are also difficult to implement and regularly fail in practice. Part of this failure comes from a high level of complexity and the inability to differentiate amongst stakeholders (Barratt, 2004). For this reason a clear view on stakeholders is needed to prevent failure.
This research aims at providing an overview on stakeholder involvement in case of an IPF network. Examples of IPF transportation are found in the Norwegian Hurtigruten (Levin et al., 2012) and bus sharing initiatives in London (Trentini and Mahléné, 2010), but are insufficient to accurately describe stakeholder involvement in rural transportation in the Netherlands. Integrating passengers and freight is a relatively new field of research in which Ghilas et al. (2013) and Li et al. (2014) explored the concept most recently. However, these papers analysed an IPF network in an urban setting, whereas rural areas seems to be under investigated. In addition, a thorough identification of the relevant stakeholders and their mutual relationships has not yet been addressed in the literature. The aim of this research is to build on transportation theory by providing insights on stakeholder involvement in an IPF network. Investigating an IPF network is especially interesting in rural areas in the Netherlands, since rural areas are faced with declines in both passenger and freight transportation.
This paper seeks to address the following research question:
! Which stakeholders are involved in integrated passenger and freight transportation networks and how can these stakeholders and their relationships be classified?
With the focus on stakeholder classification and analysis of stakeholder relationships in an IPF network, the following sub questions are investigated.
1. Which stakeholders exist in separate passenger transportation and freight transportation networks and what is their role?
2. Which stakeholders can be identified in an integrated passenger and freight (IPF) network and how can these be classified?
3. What are the interrelationships between stakeholders in an integrated passenger and freight (IPF) network and how can these be defined?
Fig. 1. Research design.
An overview of the research design is given in Figure 1. The research design incorporates the sub questions listed previously to answer the main research question. First, stakeholder theory is addressed to select an appropriate stakeholder framework. After this, passenger and freight transportation systems are analysed separately, answering the first sub question. Literature on integration in an IPF network is scarce and is compensated by using insights from a workshop organized with the industry. Literature and workshop insights are combined and translated into a conceptual stakeholder framework and accounts for the second sub question. Data for validating the framework is gathered through semi-structured interviews. The exploratory nature of an IPF network means measurable field data is limited or absent. Therefore, interviews better suit the nature of this research compared to a statistical analysis. Interview outcomes will validate the framework. Subsequently the interview data is used to define interrelationships between stakeholders, as stated in the third sub question, and is validated by expert review.
The remainder of this paper is organized as follows. Section 2 elaborates upon the stakeholder theory followed by the literature insights on stakeholder involvement. Section 2 is concluded with the workshop insights and the stakeholder conceptualization. Section 3 addresses the methodology and Section 4 presents the results of the conducted interviews held with the industry. Section 5 discusses the results and the paper is concluded in Section 6.
2. Literature insights and framework development
As stated by Varvasovszky and Brugha (2000) a stakeholder analysis generates knowledge about actors and organizations to understand their behaviour, interest and interrelations and can be used to assess stakeholder influence in a decision- and implementation process. In order to obtain such knowledge particularly in the context of an IPF network, a stakeholder analysis is performed. The stakeholder theory is addressed first to provide clear definitions and to select the most appropriate framework. Second, analysing steps adapted from Walker et al. (2008) are followed. These steps share similarity with several other stakeholder identification theories in literature and include: (i) identifying (ii) prioritising and (iii) visualizing stakeholders.
2.1.1. Stakeholder theory
are commonly used and well cited in the academic world. The first framework is the salience model of Mitchell, Agle and Wood (1997) and consists out of the attributes of power, urgency and legitimacy. Attribute measurement is binary and the model classifies stakeholders according to the three attributes into eight different stakeholder groups. The approach is used frequently, but also questioned due to its binary limitations (Mainardes, Avles and Raposo, 2012), meaning the model is not able to differentiate stakeholders within the attributes of power, urgency and legitimacy. Since the model of Mitchell et al. (1997) is constraint in prioritising stakeholders within the attributes, a different stakeholder method is used. Literature on stakeholder analysis presents the approach taken by Kamann (2007), using a two dimensional framework with the dimensions power and interest to position and classify stakeholders. The framework of Kamann (2007) is respected in literature and used throughout the years with an agreed understanding on the dimensions of power and interest (Olander and Landin, 2005; Kamann, 2007).
Deephouse and Parent (2007) consider power as an irreplaceable attribute necessary for stakeholders to be identified, since it is rarely missing in stakeholder research. Power is defined as the influence to alter the decisions or outcomes of the system (Newcombe et al., 2003). The second axes in the framework represents the interest dimension. According to Olander and Landin (2005) interest refers to the expectation and motivation of stakeholders in project decisions. In an IPF network, stakeholders are likely to have different reasons to participate and different expectations regarding the outcomes. As introduced, rural area transportation is faced with economic and environmental pressure. The economic, environmental and societal factors of sustainability are suited to translate rural pressure into an accurate interest dimension. Similar measures for sustainable transportation are found in recent papers (Chester and Ryerson, 2014; Lindholm and Behrends, 2012; Behrends et al., 2008), justifying its use.
2.1.2. Potential stakeholder patterns
The involved stakeholders are classified according to the dimensions of power and interest. These dimensions are similar to the assessment criteria of Olander and Landin (2005) and are scored on a scale from one to ten. In doing so, the stakeholders can be compared with respect to their different positions in the framework. Horizontal and vertical distance in the framework represents different scores of power and interest and allows the position of stakeholder to be interpreted. Due to the exploratory nature of integrated passenger and freight transportation, it is unclear which patterns to expect beforehand. Based on literature the stakeholders could be classified, amongst other options, as contracted versus non-contracted groups Clarkson (1995), or as internally or externally involved stakeholders (Jones, 1995; Newcombe, 2003; Kamann, 2007). Post stakeholder analysis should reveal whether distinctive patterns exist amongst the identified stakeholders in an IPF network and by which characteristic these can be classified in practice.
2.2. Passenger transportation
pricing and is considered as an important attribute in measuring transportation quality (Tyrinopoulos and Antoniou, 2008). Furthermore, travellers expect a reliable and a value for money service. This makes travellers economically interested in the outcomes of a transportation network. The bus and train transportation provider represent the second stakeholder. The Dutch passenger transportation system is arranged by tendering agreements and consists out of bus and train transportation (Mouwen and Rietveld, 2013; van de Velde et al., 2008; Veeneman et al., 2006). The interests of transportation providers relate to the way their contract is evaluated. With the 2001 competitive tendering (CT) legislation in the Netherlands, the CT procedure shifted towards an incentive based system (Gatta and Marcucci, 2007), where quality has become the main assessment criteria instead of predefined economic targets. Although the economic performance is considered as important, the transportation providers have societal interests in order to meet the tendering agreements.
The community is seen as a catch-for-all stakeholder (Dunham, 2006), meaning it is a frequently identified stakeholder in stakeholder analyses. According to the stakeholder definition in Sub-Section 2.1.1, the community is a stakeholder who is affected by the outcomes of the system. The community does not actively participate in the network, but does depend on the outcomes of passenger transportation, e.g. environmental consequences, liveability and economic attractiveness of the region. The local community is therefore acknowledged in transportation literature as a stakeholder (Veeneman et al., 2006; Geurs et al., 2009). Last stakeholder to identify is the government. As a tendering commissioner the government has economic, environmental and societal interest in passenger transportation. A particularity of the Dutch government is its financing of passenger transportation (van de Velde et al., 2008). The interests of the government are reflected in the quality specification of the tendering agreement. The economic interest of the government is found in the desire to use public resources more efficiently (Veeneman et al., 2006). Government interest is also recognized in the societal and environmental impact passenger transportation can have on the society (Geurs et al., 2009). By arranging minimum standards in the tendering agreement, the government indirectly protects the society. Furthermore, availability and affordability of transportation for the less well off are important interest values (Veenman et al., 2006), which are protected by the government. The environmental interest of the government is found in the emission levels within tendering agreements and in general transportation legislation. An example is the environmental impact analysis (EIAs) required for transport investment approval in the Netherlands (Annema et al., 2007). By financing, regulating and controlling the positive and negative externalities of passenger transportation, the government is believed to have considerable power over the outcomes. The identified stakeholders are summarized in Table 1.
Table 1: Stakeholder involvement in passenger transportation.
Stakeholder Descriptive Main interests Econ Env. Soc. References
Passengers Daily commuters, recreation public Perceive transportation as a service
Ticket pricing Service reliability Travelling comfort
x
Mouwen and Rietveld (2013) Geurts et al. (2009) Tyrinopoulos et al. (2008) Bus provider Public transportation provider
Contracted by tendering procedure
Tendering targets
Optimise quality x x
Mouwen and Rietveld (2013) Van der Velde et al. (2008) Veeneman et al. (2006)
Train provider Public transportation provider Contracted by tendering procedure
Tendering targets
Optimise quality x x
Mouwen and Rietveld (2013) Van der Velde et al. (2008) Veeneman et al. (2006) Community Affected by transportation outcomes
(e.g. accessibility schools and services)
Regional accessibility Quality of life x x Geurts et al. (2009) Veeneman et al. (2006) Government Financial supporter
Commissioner of tendering contracts Monitoring transportation sector
Efficient transportation Reliability of service Protecting public values Environmental impact
x x x
2.3. Freight transportation stakeholders
This paper is focussed at domestic freight transportation particularly and does not consider border-crossing transportation. Investigating a structure of a supply chain identifies stakeholders in the process. Consider the example of product ordering. The customers and businesses are able to initiate freight movement by placing orders (Tyan et al., 2003; Weltevreden and Mindali, 2009). As noted by Weltevreden and Mindali (2009) who conducted research in the Netherlands, freight volume can therefore exist out of business-to-consumer (B2C) and business-to-business (B2B) orders. This identifies customers and businesses as stakeholders in freight transportation that are both positioned at the receiving side of a supply chain. B2C and B2B customers of today expect next day delivery that is free of charge more often (Hantula and Bryant, 2005). Based on this remark, the customer stakeholder is believed to have an interest that is economic in nature. The core company at the supplying side of the chain takes responsibility for order fulfilment. Product orders are picked-up by either an internal logistical department or are prepared to be outsourced to a third part logistics (3PL) provider. Dispatching orders to an internal logistical department does not reveal a new stakeholder. However, logistical services are more often outsourced (Cho et al., 2008). Outsourcing the logistical service by the core company identifies the transport operator as a stakeholder in freight transportation. The transport operator takes responsibility for movement between shipper, i.e. core company, and the customer. Based on the previous, both the core company and the transport operator are identified as stakeholders in freight transportation.
For the core company there is pure economic interest. Costs are traditionally the performance criteria to evaluate transport logistics in the supply chain (Cohen and Moon, 1990). The costs of transportation should be in line with the speed- and reliability performance of the transportation provider. The transport operator aims at minimizing costs as well and tries to maximize its utilization- and service levels. These objectives are economical in nature, but come with great logistical complexity (Gelareh and Nickel, 2011). Besides the economic interest, transportation providers are more often interested in environmental performance as well (Isaksson and Brodin, 2013). In a competitive freight transportation market, price is no longer the main selection criteria. Core companies have the option to choose a transportation provider, which makes lean and green performance, from a transportation provider’s perspective, even more important. In addition, the power of the transportation provider over the outcomes of the system is considered as weak since a core company can easily replace the freight transportation provider in case of dissatisfying performance.
Stakeholder Descriptive Main interests Eco. Env. Soc. References
Customers
Buyer side of supply chain B2C relationship Initiates freight movement
Low product pricing Fast product delivery Flexible deliver options
x x
Weltevreden and Mindali (2009) Hantula and Bryant (2005) Tyan et al. (2003) Organizations
and Businesses
Buyer side of supply chain B2B relationship Initiates freight movement
Low product pricing Fast product delivery Flexible deliver options
x x
Weltevreden and Mindali (2009) Hantula and Bryant (2005) Tyan et al. (2003) Core company
Supplying side of supply chain B2C and B2B sales and deliveries Order processing
Minimum logistical costs Reliable delivery service x
Weltevreden and Mindali (2009) Cho et al. (2008)
Logistics provider (transport)
Collects and delivers freight Private infrastructure Own vehicle fleet and capacity
Cost optimisation Operating efficiency
Lean and Green image x x
Isaksson and Brodin (2013) Zhou et al. (2011) Gelareh and Nickel (2011) Community Non-users of freight transportation
Affected by indirect outcomes
Health & Living conditions
Reduced road congestion x Macharis (2005)
Government Provider public infrastructure Transport policy maker
Regulatory control –taxes
Legislation and land use x x
Crainic et al. (2004) Macharis (2005) Forkenbrock (2001)
Table 2: Stakeholder involvement in domestic freight transportation.
2.4. Integrated Passenger and Freight Transportation
2.4.1.The concept in practice
The Norwegian Hurtigruten (Levin et al., 2012) and bus sharing initiatives in London (Trentini and Mahléné, 2010) are examples of integrated transportation in practice where freight transportation is combined with passenger transportation. Other examples are found in long-haul air transportation where transportation costs are reduced and utilization levels are improved by carrying freight in compartments of passenger aircrafts (Zhang et al. 2004). However, in short-haul transportation people and freight are rarely sharing space, which indicates the potential efficiency gains of integrated transportation (Lindholm and Behrends, 2012). The opportunities for short-haul ride sharing in the context of rural area transportation in the Netherlands are explored further in the remainder of this paper.
2.4.2. Workshop insights
Following the research design of Figure 1, the insights on stakeholder involvement in an IPF network are gained through the use of a workshop. The workshop was held during this research and involved researchers, politicians, library representatives, a transport operator and a knowledge centre, with the aim to organize an IPF pilot case in the Netherlands. The results are used to identify missing stakeholders that are not identified in Section 2.2 and 2.3, but are involved in an integrated passenger and freight transportation network. During the workshop session, several remarks regarding the design of the network were placed, leading to new insights on stakeholder involvement. The discussed design of an IPF network during the workshop fits the scope that has been indicated in Sub-Sections 2.2 and 2.3 by focussing on bus and train transportation between urban and rural areas in the Netherlands. The outcomes on stakeholder involvement are summarized briefly.
The workshop participants proposed using consolidated end points as an alternative to the ‘at home delivery’. These points allow customers to pick-up ordered products from an automated parcel point at convenient times and relieves the IPF network from the last mile complexity. Weltevreden, 2008; McLeod et al., 2006; McKinnon and Tallam, 2003 acknowledge the emerging need for such end points, also referred to as collect and deliver points (CDP). Both literature and the workshop agree upon the benefits of the CDP’s, which leads to the identification of the ‘consolidator’ as a new stakeholder. The consolidator takes responsibility for accumulating freight, manages the collect and deliver points and guarantees a smooth transition of freight at arrival and departure of the selected transportation modality (e.g. bus or train). Most certainly there are other designs of the network that could be considered, but exploring the concept of an IPF network makes the previous stated design the most realistic. The remainder of this paper investigates an IPF network with the outcome that the traditional freight operators (3PL’s) are replaced by the efforts of the consolidator.
2.5.1 Conceptualising the framework
Previous insights provide a clear starting premise to position the identified stakeholders in an IPF network. The framework in Figure 2 represents the different dimensions of interest (i.e. economic, environmental or societal) which were defined as follows:
! Power is defined as the influence to alter decisions or outcomes of the network (Newcombe et al., 2003). ! Interest is divided into the economic, environmental and societal interest in the outcomes of the network
according to the indicators of sustainability (Lindholm and Behrends 2012; Behrends et al. 2008).
The results and position of stakeholders in Figure 2 are approximations based on the theoretical findings Sub-Section 2.2 and 2.3 and the workshop insights obtained in Sub-Section 2.4. The conceptual framework is therefore created with a top-down approach (Reed et al. 2009) and reflects our interpretation of the gathered insights. The conceptual framework will be validated with interview results in Section 4.
The involved stakeholders in an IPF network that are identified so far are listed and numbered as follows: 1. Users; 2. Core company; 3. Transportation provider; 4. Consolidator; 5. Local community; 6. Government.
Fig. 2. Conceptual framework: power and interest allocation in an IPF network.
2.5.2 Dimension of Power
conceptual framework in Figure 2. The network depends on the cooperation of these high-powered stakeholders in order for the network to operate properly. Besides, analysing the conceptualized framework reveals that both the transportation provider and the consolidator have a direct say in the logistical outcomes (e.g. deliver frequency, speed and costs). In contrast, the community, users and core companies are not able to influence these outcomes directly and are therefore considered as less powerful stakeholders in an IPF network.
2.5.3. Dimension of Interest
Economic interest is highly valued by the emerged consolidator in an IPF network. Participation of this stakeholder rests mainly on obtaining a profit in the network. The same holds for the core company, which expects lower transportation costs from an IPF network. Differences in economic interest are found in between the transportation provider and the consolidator. Since the tendering agreement of the transportation provider is not purely focussed on economic outcomes, the transportation provider is believed to have a lower interest in economic outcomes compared to the consolidator in the conceptual framework. The environmental interests dominate at the government, local community and consolidator most. Besides organizing freight transportation at a lower cost than traditional freight options, the environmental outcomes are considered as a unique selling point of an IPF network as well. The environmental outcomes enable the consolidator to exist in an IPF network and explain its interests in economic and environmental outcomes. Government and community interest is explained by their preference for sustainable transportation solutions compared to polluting and individually organized passenger and freight transportation. No sincere environmental interest is found at the core company or at the side of the end users, presumably because of their strong focus on lower transportation costs.
Societal interest is noticed at the government, local community, transportation provider and users. Tendering agreements and the protective role towards the less well off seems to match greatly with societal interest of the government. Furthermore, the 2001 transport policy in the Netherlands shifted the economic interest of the transportation providers towards societal interest. The local community has an above average interest in societal outcomes since an IPF network allows public services (e.g. library, foreign newspapers and stores) to survive in rural areas, which might otherwise disappear. The users of the network have an average societal interest. As a customer they benefit from the convenience of flexible pick-up and delivery points in an IPF network whereas from a passenger point of view they benefit from future-proof transportation in the region. No societal interest is derived from the core company and the consolidator, emphasizing once again their strong economic interests in the outcomes of an IPF network.
2.5.4. Patterns in an IPF network
3. Research Methodology
3.1 Theoretical development
To understand who’s in why, a stakeholder analysis is performed. Identifying and classify stakeholder involvement in the network is approached best by the three steps developed by Reed et al. (2009). Compared to other stakeholder analysis methods, the model of Reed et al. (2009) has the advantage to cover all aspects of the research objective, i.e. to identify and classify involved stakeholders and to analyse their interrelationships. Due to the fit of this model with the research objective, this research is approached using the three analysing steps to accurately explain stakeholder involvement in an IPF network.
Identifying the stakeholders based on literature and workshop insights is the first stakeholder analysing step in this paper. Transportation literature of today is believed to be insufficient in providing a complete overview on stakeholder involvement in an integrated transportation network. For this reason this paper combines literature and workshop insights to create a conceptual framework in Section 2.5.1 on stakeholder involvement in an IPF network. The second stakeholder analysing step consists out of validating the conceptual framework using reconstructive categorisation (Reed et al. 2009). Interviewees are asked to reproduce the framework to be able to compare their outcomes with the conceptual framework in Section 2.5.1. In doing so, the results of this paper are not solely based on a researcher’s perspective, but also include the perception of stakeholders.
Identification is one part of the research objective. After the stakeholders are identified, the interrelationships are addressed to complete the stakeholder analysis in this research as a third step. To identify and define relationships the Actor-Linkage-Matrix (ALM) is the preferred method of use. The ALM can be used to map the network, identify key stakeholders and provides a rationale for intervention (Biggs and Matsaert, 1999). The stakeholder network analysis (SNA) is a similar method, but focuses on strengths and weaknesses of existing ties and does not match with the research objective to identify relationships first. The emerging nature of the IPF network asks for a method focussed at identification of interrelationships, in which the Actor-Linkage-Matrix can fulfil a better role. The relationships are defined as neutral, depending or conflicting and are adapted from Reed et al. (2009), which is recognized in literature as a popular method to use. The matrix is presented in Section 4, providing an overview on the relationships within an IPF network. 3.2 Data collection method
The workshop was arranged to gather insights on integrated transportation from experts from the field. Insights have been added to Section 2 of this paper and were used together with literature insights as input to create the conceptual framework. Workshop participants consisted out of researchers, politicians, library representatives, logistical entrepreneur and a knowledge centre. The outcomes of the workshop are documented and used for data triangulation (i.e. using multiple sources) to improve the validity and reliability of the research findings (McCutcheon and Meredith, 1993).
Table 3: Interview list with organizational description and stakeholder representation.
3.3 Data analysing method
The interviews are analysed using structured steps to ensure proper documentation and registration of the data. With permission of the individuals, interviews are recorded, which requires transcription afterwards. As stated by Voss et al. (2002) this is done within a minimum time-span to maximize recall and allowing data gaps to be filled in after the visit. Transcripts are send back for review and only used as input after approval. The collected data is coded according to the most common topics that are discussed during the interviews. Lastly, the coded data is summarized based on the key results of each stakeholder of which an overview is given in Section 4 of this paper. The same coded data is used to create the relationship matrix (ALM). The ALM model, provided in Section 4, is validated afterwards by expert review to increase validity and reliability of the results and findings.
Two experts are selected to objectively review the results, reasoning and findings of this paper. From an academic point of view a researcher in the field of Operations Management is included. An additional expert review is given by an industry expert specialized in urban freight movement to validate the results of this paper in view with practice. The received feedback and comments from the experts did not reveal prominent concerns and feedback has otherwise been process in the relevant sections of this paper.
4. Results and analysis
This section presents and analyses the results. The collected data covers two parts of the research objective, the identification and interrelationships of stakeholders. First, results on the identified stakeholders in an IPF network are assessed based on the dimensions of power and interest, scored by respondents on a scale from one to ten. The results reflect the combined view of all stakeholders that were interviewed in the process. Power is assessed with an average score of five, with higher and lower values being classified as above or below average powered stakeholders. Interest is assessed using open question interview answers and is crosschecked with the one to ten score given by respondents. The results on the power and interest dimensions, allow the positioning of stakeholders in the conceptual model of 2.5.1 to be verified.
Secondly, the results are used to investigate interrelationships between stakeholders in an IPF network. The Actor-Linkage-Matrix (ALM) identifies the nature of interrelationships and is created using the collected data as input. Other relevant factors stated by the interviewees cover the topics of classification, coordination, trust and conflicts. Information from eight interviews is extensive and for reasons of brevity only key results are presented. The results are summarized in Table 4 and discussed in the remainder of this section.
Interview no. Represented stakeholder Nature of the organization/institute Relevant position/reference [1]
[2] [3]
Users (passengers) Users (consumers)
Bureau of transportation (the Netherlands) Retailer (rural area located)
Local library (network of public libraries)
Transportation policy officer Owner/director
Management assistant [2]
[3]
Core company Retailer (rural area located)
Library (network of public libraries)
Owner/retailer Management assistant [4]
[5]
Consolidator Parcel delivery specialist (collect and deliver points) City logistics specialist (freight consolidation)
Owner and director Project manager
[1] Transportation provider Bureau of transportation (the Netherlands) Transportation policy officer
[6] Local community Knowledge institute:
(Rural area decline, the Netherlands)
Project manager [7]
[8]
Government Province (political party)
Anonymous province (the Netherlands)
Table 4: Overview of the key results.
4.1 Stakeholder power
The ability to influence the outcomes of the system differs amongst stakeholders greatly. Users at the receiving side of the supply chain and the community, who is positioned outside the chain, are perceived as stakeholders with below average power. Six out of the eight interviewees defend the fact that “users are only powerful in case they are united or represented in a larger group”. The interview results identify the core company as an average powered stakeholder, whereas the core companies scored below average in the conceptual model. Arguments in favour of average power were given in twofold.
At the supplying side of the chain, core companies have decisive power whether to use an IPF network and under which conditions. Without the participation of core companies it is not possible to obtain sufficient freight volume to support the network. This justifies a potential demanding attitude of a core company towards other stakeholders and expresses its degree of power. Providing freight volume and the ability to set out demands regarding e.g. logistical costs and speed, gives the core company an average power in the context of the integrated network. The transport provider is one of the key stakeholders in the chain of transportation. Without full consent and cooperation of the transport provider there is no such thing as integrated passenger and freight transportation. This advocates for a high-powered position of this stakeholder. However, our results indicate that tendering agreements limit the decisional options of the transport provider and averages out its degree of power in an IPF network.
The consolidator is perceived as an above average powered stakeholder since it fulfils a key role in the network. The consolidator is involved at an operational level and takes responsibility for cumulating freight and ensures a smooth transition during loading and unloading. Five out of the eight interviewees position the consolidator as the highest and most powerful stakeholder in the network. “Power in practical terms is, amongst other things, the ability to make logistical agreements on deliver frequency and pricing.” As a key-actor the consolidator has the strongest position in making such agreements. The negotiating power and its influence at an operational level, makes the consolidator above average with respect to the dimension of power. Government power closely follows the position of the consolidator with five out of eight interviewees positioning the stakeholder above average. “The government has decision making power through its legislating and regulatory regime, making it potentially the most powerful stakeholder.” The lower power position of the government compared to the consolidator is because of the time lag between government action and effect. At an operational level, the consolidator has a direct influence on the performance and outcomes of the network, whereas interventions by the government come with some delay. In sum, the results indicate an above average power position for the consolidator and the government.
Stakeholders/
Factors Users Core Company Consolidator Transportation provider Local community Government Stakeholder
power Below average Average Above average Average Below average Above average
Main interest Economic/ Societal Economic Economic Economic/ Environmental Societal/ Environmental Societal/ Environmental Stakeholder
classification Non-key-actor Non-key-actor Key-actor Key-actor Non-key-actor Facilitator
Chain
coordination n/a Needed (external) Needed (external) Needed (external) n/a Needed (internal/external)
Trust perceived
as important Yes Yes Yes Yes Yes Yes
Conflict Identified (Transportation provider) Identified (Consolidator) Identified (Transportation provider) Identified
4.2. Economic interest
The logistical performance of the network is indicated to be an important factor underlying economic interest of stakeholders. Both the core company and the consolidator value efficient outcomes of the network greatly. What is considered efficient by the respondents ranges from lower transportation prices, running operations with higher utilization levels and less downtime of capacity. Especially the retailer and management assistant at the library expect from the viewpoint of a core company an improved performance from the IPF network compared to current distribution services. Although the consolidator and the core company interviewees expressed their willingness to act in line with environmental and societal interest, they confess that running a business means economic interest comes first. “As a business there is no such thing as financial slack for idealism” and “those who are driven purely by environmental outcomes, will economically not last in the long run” are comments heard from interviewing two consolidating organizations, emphasizing their priority for economic interest in the network.
Due to the tendering agreement, the transportation provider’s interests are antagonistic. Policy officers, both within the government and at the bureau of transportation, acknowledge the benefits of integrating passengers and freight, as it is enables more efficient passenger transportation. These results emphasize the basic economic interest of the transport provider in the network. Besides economic benefits, the results indicate towards environmental interest of the transportation provider, since it is required to meet tendering targets of which some relate to sustainable transportation.
Economic interest at the users side of the supply chain is questioned amongst the interviewees. Besides potential economic benefits, the IPF network brings convenience to users in terms of collect and deliver points (CDP). For users who are raised with the expectation of free delivery, such convenience might overrule the economic interest. Initiating an IPF network might trigger consumers at a societal level, knowing that parcel delivery points suits better to their flexible lifestyle. Passengers do not benefit from convenient freight deliveries and gain the most by the economic outcomes, e.g. affordability of the network.
4.3. Environmental and societal interest
Analysing the results on environmental and societal interest reveals a convincing position of two specific stakeholders. Seven out of the eight interviewees state that of all stakeholders the government and local community are interested most in environmental and societal outcomes of the network. Government interest in both factors is supported by results that relate to a suggested parenting role of the government over the society. “The government believes it is obligated to protect others.” Protecting the less well off and ensuring service availability in rural areas are intrinsic motivators of the government, mentioned frequently by the provincial council and government policy officer.
With respect to the local community, societal interest prevails along with the interest in environmental outcomes. Preserving goods and services, ranging from foreign newspapers to public libraries, results in a direct gain on community level. Besides, as stated by the project leader of the knowledge institute, “we are all interested in environmental outcomes as we are all part of the community in our private life.” Organizing freight movement through an IPF network, replaces the value added service of the third party logistics (3PL) provider between cities and rural areas. The network replaces individually organized freight movement with consolidated freight transportation. This means the community benefits from less road congestion, noise- and air pollution and an improved overall quality of life. Based on the interview responses, local community interest is to be found in societal and environmental outcomes of an IPF network.
these stakeholders rank lower on these dimensions compared to the government and community, since they are financially constraint to commit to societal and environmental outcomes fully. Based on the results in Table 4, it cannot be stated that having an above average power relates to any specific kind of interest. 4.4. Stakeholder classification
Different roles, intrinsic motivations and interests of stakeholders create a complex web that makes an IPF network difficult to manage. In order to reduce complexity, stakeholders can be classified. The interview results indicate that stakeholders are best classified according to a key acting or non-key acting role in the network. At an operational level, the consolidator and transportation provider collaborate intensively, arranging logistical activities in the network together. “Cluster the performing stakeholders separately from the others (..) some stakeholders change once the network becomes operational.” A comment from the director of an organization specialized in automated parcel delivery points and that finds support from the provincial council. The change that is referred to applies to government involvement. Four out of the eight interviewees indicate that during the developing phase of the IPF network, the government is directly involved through fulfilling a role either in financing or authorizing. However, once the network matures the government will no longer be directly tied to the network. Based on our results, the government cannot be classified as a key actor due to its limited role once the IPF network is operational: nor can it be classified as a non-key actor as this would disrespect its added value during the development phase. The interview results from the retailer and a consolidator acknowledge the evolving role of the government over time and refer to this stakeholder as a network ‘facilitator’. With an additional classification identified based on the interview results, stakeholders in an IPF network are classified in threefold: key and non-key actors along with the facilitator (Table 4).
4.5 Interrelationships: the ALM-matrix
The purpose of the Actor-Linkage-Matrix (ALM) is to identify the nature of relationships in an IPF network and provides a rationale for intervention (Biggs and Matsaert, 1999). Understanding conflicting relationships in an IPF network might provide the opportunity to anticipate and take counteractive measures to prevent conflict from happening in the first place. Interrelationships are defined as neutral if no collaboration or direct involvement exists between stakeholders. Relationships characterized by collaborative efforts, horizontally or vertically, are referred to as dependent relationships. Conflicting relationships indicate a conflict of interest, degree of competition or potential operational difficulties with other stakeholders. Previous definitions are adapted from the method of Reed et al. (2009). To identify relationships and indicators of conflict, eight interviews are conducted. The collected data is summarized in Figure 3.
Fig. 3. Actor-Linkage-Matrix of IPF network relationships.
N: Neutral D: Dependent C: Conflicting Relationship with: Us er s Co re c om pa ny Co ns ol id at or Tr an sp or ta tio n pr ovi de r Lo ca l co m m un ity Go ve rn m en t
From the perspective of:
Figure 3 presents a comprehensive overview of the interrelationships in an IPF network. None of the relationships in the ALM is characterized by pure conflict, which means that initiating an IPF network will not result in conflict by definition. Based on the results of the Actor-Linkage-Matrix, conflict emerges out of a neutral or depending relationship. If the network operates as intended, there is no reason for conflict. However, the network is as strong as its weakest link and in case of IPF networks the relationships with the consolidator and transportation provider have been indicated by the respondents as the most vulnerable to conflict. The conflicts as perceived by the interviewees are marked in the relationship matrix of Figure 3. 4.5.1. Analysing conflict
To understand the reasons for potential conflict it is essential to know in which part of the chain conflict would likely emerge. Given the response of the interviewees it is unlikely that stakeholders come in conflict with the government or local community. Rather, most conflicts are clustered around the key actors in the network. Analysing the results in detail reveals that all stakeholders perceive potential conflict with their nearest point of contact. This might intuitively be explained by the fact that in case of wrongdoing, late deliveries or damages during transport, the last spoken stakeholder is commonly held accountable. The core company holds the consolidator accountable and the same holds for the relationship between the consolidator and the transportation provider. Seven out of the eight interviewees indicate that the latter relationship is most vulnerable for potential conflict. Interviewees often mention that “negotiating about logistical conditions e.g. delivery speed, frequency and costs, could in theory be a source of conflict.” Other topics of negotiation that are found in the results range from fair profit- and cost allocation and responsibility agreements. The reason to negotiate might be because stakeholders are reluctant to take any risk. Especially for the core company and the transportation provider there is a threshold to step in the unknown of an IPF network not knowing whether it will compromise their current performance. In sum, conflict is mainly located in the relationship between the consolidator and the transportation provider and in the relationships of stakeholders who are in direct contact with these actors.
Indicators of conflict are associated with trust issues in the network. Due to the exploratory nature of the IPF network, trust is not easily established. The interviewees unanimously agreed upon the importance of trust in relationships with or in between key-actors of the network. As stated by the library management assistant: “If the consolidator fails to deliver, we as a company face the consequences.” Uncertainty about who takes responsibility for overall network performance, information sharing, and profit allocation, are perceived as main sources of distrust that potentially causes conflict in an IPF network. The need for trust goes up-and downward in the chain. Most interviewees indicate trust as most important in the relationship between the consolidator and the transportation provider as key-actors in the network, as is seen in Figure 3.
4.5.2 Chain coordination
The discussion on indicators of conflict (i.e. issues of trust and uncertainty), caused interviewees to question the completeness of the identified stakeholders in an IPF network. To prevent conflict and to overcome issues of trust and uncertainty in the network, more than half of the interviewees suggest adding a seventh stakeholder, a chain coordinator. The chain coordinator takes operational control over the network, relieving other stakeholders from this task. Several coordination models can be considered. “Managing the network properly, means finding a director who is not in conflict with itself”. One of many comments, in this case from a consolidating project manager that indicates the need for neutral coordination in the network.
argues against internal coordination: “Giving control to an consolidator would not be a wise move, since it is not able to act neutral once it is part of the chain.” Since there are conflicting points of view regarding the type of coordination, a hybrid model is considered as an alternative that has been proposed by the same government policy officer. Hybrid chain coordination is a promising alternative compared to external or internal coordination, considered by two out of eight interviewees. To its advantage, the hybrid model lets an internal stakeholder take responsibility and control over an IPF network and therefore does not require an additional stakeholder by definition. As stated by the provincial council and library management assistant, an additional stakeholder in the network would increase the costs of the network, costs that can be avoided with an internal, or hybrid model.
The ability to act neutral, as stated by both the consolidating project manager and the government policy officer, is the main but not the only argument to opt for an external coordinating body. The director of the parcel delivery organization mentioned the advantage of external information management that comes with an external coordinator. Information management concerns invoicing and product tracing in which an external coordinator has the best position to overlook the chain. The interviewed retailer acknowledges the importance of product tracing in an IPF network: “Knowing when my products arrive means I can adjust my planning and in case of lost or damaged freight, I know who is to held accountable.”
Although the interviewees have acknowledged the need for a coordinating body, the exact position remains undecided but seems to depend on whether objectivity will be compromised. At this point, the effectiveness of each coordination model, coordinating either internal, external or in hybrid form, has not been investigated yet. Further research regarding the effectiveness of each model could provide decisive arguments to select the most suitable coordination model for an IPF network in practice.
5. Discussion
Stakeholder involvement in an IPF network has, given the results, proven to be more complex than initially thought. Although our interview results in Section 4 do confirm the involvement of additional stakeholders in an IPF network, there are opportunities in rural area transportation that need to be discussed further. Given the conceptual framework of this paper, the involvement and influence of the consolidator has been identified and validated by the industry results as expected. As stated at the conceptual framework in Sub-Section 2.5.1, the involvement of the consolidator specifically emerges in case of integrated transportation. It is hereby discussed that because of the above average power of the consolidator (Table 4), the stakeholder should be approached with priority in case of an impasse (e.g. conflicting interests) to avoid the stakeholder to become uncooperative in the network. The identification of the consolidator contributes to the completeness of the research objective to investigate stakeholder involvement in an IPF network.
However, there is more to initiating a successful IPF network other than identifying stakeholders. Analysing the interrelationships in section 4.5 argue that conflict cannot be neglected and seems to occur most often within arms-length relationships of the consolidator and transportation provider. Conflict is the failure to collaborate (Daugherty, 2011) and indicates towards fundamental lack of trust in the network. In addition to trust, our results indicate the importance to share and communicate information transparently and strive for joint decision-making in the network. Trust and transparency are enabling factors that need to be in place for successful supply chain collaboration (Daugherty, 2011). The respondents recognize the importance of trust unanimously, yet most respondents still foresee potential conflict in practice.
The results on chain coordination and of Cruijssens (2012) indicate that an IPF network in rural areas is in need of a coordinating body that resolves issues of trust and allows stakeholders to collaborate successfully without conflict. The research objective to identify stakeholder involvement in an IPF network is completed by discussing this stated need for a coordinator. The results on chain coordination in Sub-Section 4.5.2 indicate that there are conflicting points of view regarding a potential seventh coordinating stakeholder. Most arguments, given by the respondents in this paper, argue in favour of a neutral coordinating body that is located externally or configured in a hybrid model. From a researcher point of view and given our interview results, it is discussable which coordinating body fits the need of an IPF network. In addition to the results of Section 4.5 it is hereby discussed that opting for an external coordinator means that internal stakeholders are not distracted from their core business. Meanwhile, the coordinator can commit fully to its directing responsibility in the network. Hybrid coordination is considered as a realistic alternative given our results in 4.5.2, but comes with the disadvantage of a stakeholder being internally involved in the network. This questions whether an internal stakeholder can maintain the needed trust from others, once it takes control over the network in a hybrid configuration.
Given the results of this paper and the insights from Cruijssen (2012), it is recommended to involve an external coordinator in an IPF network to eliminate the stated concerns in Sub-Section 4.5.1 around trust. It makes room for successful collaboration in an IPF network without conflict. Assigning an external coordinator allows an IPF network to be directed according to its overall stakeholder interests, rather than pursuing the interest of one or few individual stakeholders alone. As an externally coordinated entity, the network might also overcome pure economic interest of stakeholders (Table 4) and encourage them to engage in societal and environmental renewal together as a chain. In the long run, having a coordinating body to guide such renewal is believed to be the road towards sustainable passenger and freight transportation in rural areas.
Due to the exploratory nature of this paper, the interview results in Section 4 are collected from a selective group of participants and experts from the field. In order to generalize the findings beyond rural area transportation in the Netherlands, larger samples should be taken to increase the reliability of our results. Nevertheless, the findings of this paper do contribute to transportation literature in twofold by identifying the involvement of the consolidator and the need for a coordinating body in an IPF network. The importance of a coordinating body in an IPF network suggests there are opportunities to be explored to achieve sustainable passenger and freight transportation in the future.
6. Conclusion
The purpose of this paper was to investigate stakeholder involvement in integrated passenger and freight (IPF) transportation in the Netherlands. Especially in rural areas, where the population is declining, the need for a sustainable and future-proof transportation solution has been recognized. Integrating passenger and freight transportation networks is promising, but requires stakeholders to collaborate in order to achieve mutual benefits. Not understanding the interests and power of other stakeholders in the network makes it difficult to identify with whom to collaborate and might lead to a network that is not used to its full potential. This paper therefore investigated the involvement of stakeholders and identified their relationships within an IPF network to enable collaboration in practice.
The results of this paper identified the consolidator as an emerging stakeholder in integrated passenger and freight transportation that replaces individual freight operators with consolidated freight movements in an IPF network. The involvement of the consolidator relates to the activities of cumulating and transferring freight and has been confirmed by the results of this paper. Furthermore, the analysis of the interrelationships revealed several conflicting relationships in an IPF network, especially in in close contact relationships with either the consolidator or the transportation provider. As an outcome, the respondents question the completeness of stakeholders in an IPF network and revealed the potential need for a seventh chain-coordinating stakeholder. The first indications justifying the need for a chain-coordinating body come from the indicators of conflict. Indicators of conflict are found in a lack of trust in other stakeholders and around the uncertainty over the outcomes of the network. From a theoretical point of view, these indicators of conflict might obstruct successful collaboration in an IPF network and justify the involvement of a coordinating body, orchestrating the network independently and in trust of other stakeholders.
Although the respondents in this paper do not unanimously agree upon one type of coordination, the findings do recommend to involve an external coordinating body in an IPF network. The external coordinator is able to operate without having conflicting interests and creates sediment of trust and transparency to improve the interrelationships in an IPF network. Outweighing the pros and cons of this paper, indicates that the involvement of an external coordinating body is justifiable. Chain coordination seems to be an important prerequisite to successful network collaboration and completes the involvement of stakeholders, along with the identification of the consolidator, in a rural area IPF network.
Finally, this paper is not able to extend beyond the identification of stakeholders, interrelationships and the need for a coordinating body. This reveals promising opportunities for future research to quantify relationships and to investigate the effectiveness of different coordinating bodies in an IPF network. Along with the findings of this paper, this would provide additional arguments to select an appropriate type of coordination and contributes to the future development of integrated passenger and freight transportation.
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