Road Cabotage in the Swedish haulage industry : A survey on three haulage companies

Sammanfattning: Bachelor thesis in Logistics Management, School of Management and Economics, Växjö University, EKL 361, Spring 2006-05-24 Authors: Jesper Ericsson, Olov Nordgren, Henrik Frick Tutor: Åsa Gustafsson/ Helena Forslund Examiner: Helena Forslund Title: Road cabotage in the Swedish haulage industry Author supplied keywords: Transportation, European Union, Haulage Company, Road Cabotage, Five Forces Model and Generic Strategies. Background: In 1998 the European Union introduced the concept of free road cabotage. The concept implies that haulers from different Member States are allowed to perform domestic transportation in another Member State as long as it is conducted on a temporary basis. The introduction of cabotage has given rise to new competitive conditions on domestic markets within the European Union. Not all haulage companies within the European Union have the same competitive prerequisites. Swedish haulers have a high cost structure in comparison with foreign haulers and therefore it is interesting to see how they are affected by cabotage. Research Questions: o How do Swedish haulers perceive cabotage in their industry and how do they manage it today? o Which improvements can be achieved strategically to sustain and/or improve Swedish haulers’ competitive situation towards foreign haulers? Purpose: The objective of this bachelor thesis is to investigate how Swedish haulers’ are affected by competition concerning road cabotage. Depending on how they are affected by road cabotage we also intend to present strategic improvements that can sustain and/or improve their competitive ability. Methodology: Survey on three haulage companies Theoretical Framework: For our first research question we have chosen to present the concept of cabotage to enlighten readers. To be able to understand what characterises the Swedish haulage industry we have chosen Porter’s Five Forces Model as a foundation. The results from the Five Forces Model are used as inputs to the theories concerning Porter’s generic strategy. Conclusions: Through this bachelor thesis we have concluded that Swedish haulers are in different ways affected by road cabotage. Depending on their type of business, they are more or less affected by cabotage. Through differentiation Swedish haulers can sustain and improve their competitive situation. The differentiation should be focused on issues regarding markets, customers, and specific service characteristics that are difficult for foreign competitors to imitate.