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Transparency Issues Within a Transport Buyer and Provider Relationship

Transport is an important function in the supply chain. This chapter focuses on how to buy a transport service, how to form a transport contract, and how a transparent relationship will influence the risk and the relationship between transport provider and buyer. By developing a decision support tool (DST-model) and calculating the cost and the time parameters, the right price and the cost drivers will appear. The cases described in this chapter are a large Norwegian wholesaler for food, distribution to the retailer, and two Norwegian municipalities collecting household waste. In these cases, the buyer and the provider are acting blind in setting the transport price. This means that there is a huge risk for either a bankruptcy by the transport provider or an overpriced transport for the buyer.