Research On The Cooperation Model Between Railway Company And Express Delivery Company Based On The Transaction Cost Perspective

Cooperation is an eternal topic in economic research area and is always the research focus in the field of industrial organization.With the fast development of the Internet technology and E-commerce.online consumption has become one of the important daily consumption patterns,which lead to the rapid growth of courier industry.The transportation resource is the core resource upon the development of express delivery companies.And railway enjoys the advantages of large capacity,fast speed,low cost and cleanness making it a new alternative for express delivery companies.However,the cooperation between railway company and express delivery company in China is in its initial stage and the cooperation model is immature.The low progress and growing problems seriously hindered the advance of railway integrating into the modern logistics system.Therefore,it is necessary to research on the cooperation model problem between railway company and express delivery companies.Present literatures upon the integration of railway and courier industry mainly focus on the comparative advantages of railway into courier industry,the technological and economic feasibility.Fewer research pay attention to the cooperation model problem from the industrial organization perspective.Research upon the cooperation between express delivery companies and transportation companies are mostly concern the road and air transport companies.However,there are huge differences among railway,road and air transport,such as the integration of network and operation of railway industry,the specific assets and the monopoly of railway industry,etc.These factors lead to the particularity of the cooperation model between railway company and express delivery company.Meanwhile,present literatures didn't provide the theoretical explanation about the existence of different cooperation models in various contexts.The question this paper raised is:what is the generating mechanism of the cooperation model between railway company and express delivery company?This question can be further extended into two sub-questions:(1)what are the key factors affecting the cooperation model in our context?(2)How these factors influence the generation of the cooperation model between railway company and express delivery company?This paper adopted the methodology of literature analysis,model building and field research in various countries to study the key factors influencing the cooperation model between railway company and express delivery company based on the contract theory.Three factors are extracted in the end,including the specific asset,the organizational structure of railway industry and the quantity of business participants.A theoretical analyzing framework was constructed from the perspective of transaction cost which illustrates the mechanism of cooperation model between railway company and express delivery company.The game model also provides the verification to the framework.In order to prove the effectiveness and general applicability of the theoretical framework built in this paper,three cases have been revisited,including the French case.German case and the Trans-European case.Their different models and the mechanism behind them have been deeply analyzed.The results show that the framework can well explain those three cases.Based on this fact,this paper also studied the cooperation model between railway company and SF-Express in China and discussed the reason why the cooperation between railway company and STO-Express didn't work well.Major conclusions were presented based on this mechanism:(1)The complete railway transport requires the integration of network and operation.The operation part is with competitive property while the network is with public property.The different properties make the perfect integration strategy to railway resource not feasible for express delivery company.In order to reduce the opportunism risk caused by specific assets and relative transaction cost,quasi-integration strategy becomes an option for express delivery company.It requires the express delivery company to control the property right of the vehicle.(2)Under the seperate organizational structure of railway industry,contract model becomes feasible when there is no need for specific assents investment and limited quantity of business participants.(3)When there is a requirement of specific assets investment,express delivery companies prefer to build the industrial alliance instead of the contract model to reduce the opportunism risk and increase the cooperation benefit.While express delivery company will adopt the quasi-integration strategy only when the savings of transaction cost or the extra benefit of this model is big enough,especially bigger than the sum of investment of transport facilities and the operating cost.(4)When the organizational structure of railway industry is integration,the quasi-integration becomes impossible.The default cost of railway company is low which increases the default risk and the bargaining power of express delivery companies is limited.Therefore,the transaction cost of contract model is bigger than the industrial alliance.The equilibrium of the cooperation model between railway company and express delivery company is to adopt the industrial alliance model.(4)When the quantity of business participants increases,especially when the complete railway transport requires more than one railway companies to cooperate with each other,the transaction cost of contract model is the biggest.Railway company and express delivery company will prefer to adopt the industrial alliance model.This is mainly because the transaction cost between various railway companies plays a more important role in the total transaction cost and it finally affects the determination of the cooperation model among different railway companies and express delivery companies.