Supply chain security: Agency theory and port drayage drivers

Michael H. Belzer, Peter F. Swan

Research output: Contribution to journalArticlepeer-review

17 Scopus citations


Supply chain security presents numerous challenges to governments interested in defending against terrorist threats. While most approaches stress technological solutions, scholars and policy-makers tend to overlook economics, labour market issues, and industrial relations. Applying agency theory from behavioural economics, this article analyses threats to the US supply chain and opportunities for efficient solutions. Using data from a sophisticated web-based survey of owner-operator cost-of-operations, it shows that drayage1 drivers are among the lowest paid truck drivers and workers in the US. We provide evidence that low pay is associated with both safety and security risk. Low-wage labour and subcontracting present challenges to US and foreign supply-chain security because the market attracts workers who have few other employment options. In this environment, principals and agents currently make inefficient and inequitable contracts because markets do not reflect the complete costs associated with low-probability/high-impact events like cargo theft and transport security.

Original languageEnglish (US)
Pages (from-to)41-64
Number of pages24
JournalEconomic and Labour Relations Review
Issue number1
StatePublished - May 2011

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management


Dive into the research topics of 'Supply chain security: Agency theory and port drayage drivers'. Together they form a unique fingerprint.

Cite this