Quasi-Integration in Package Transportation

The small firm size and the huge number of owner-operators working in less-than-truckload trucking hide an economic reality that is much less fragmented. Most of these owner-operators are “quasi-integrated” in higher organizational structures. In the Spanish institutional environment, this hybrid form offers two important advantages. It avoids moral hazard problems, which are mainly related to the use of the vehicles, while at the same time it makes possible to reach economies of scale and density. International comparisons also suggest that institutional constraints in Spain prevent vertical integration from intensifying in consonance with recent technological changes, which have come to facilitate integration. Our analysis questions those trucking regulations that encourage vertical integration without modifying these institutional constraints.