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Reallocation of risks within supply chains: The practice of enhanced liability clauses

Ekwall, Daniel and Nilsson, Fredrik LU (2011) 23rd annual NOFOMA conference, 2011 In [Host publication title missing] p.317-333
Abstract
Purpose of this paper

The expression Enhanced Liability refers to clauses in a contract which obligation one of the partners to accept extended liability for future claims payments beyond normal standards of transport law, conventions or national standard terms and conditions for

logistics service intermediaries, logistics service providers and carriers. This paper provides explanations and understanding of how logistics business actors are using enhanced liability clauses in supplier contacts to reallocate their own risks.



Design/methodology/approach

The research is based on a system-theoretical approach, which emphasizes a holistic view

instead of the characteristics of the... (More)
Purpose of this paper

The expression Enhanced Liability refers to clauses in a contract which obligation one of the partners to accept extended liability for future claims payments beyond normal standards of transport law, conventions or national standard terms and conditions for

logistics service intermediaries, logistics service providers and carriers. This paper provides explanations and understanding of how logistics business actors are using enhanced liability clauses in supplier contacts to reallocate their own risks.



Design/methodology/approach

The research is based on a system-theoretical approach, which emphasizes a holistic view

instead of the characteristics of the different parts. The research method used in this paper is deductive. The analysis is based on complexity theory with regard to both the deductive framework and several interviews with insurance and security experts in logistics business.



Findings

The usage of enhanced liability clauses in contracts is increasing and the exact content of each enhanced liability clause is determined in the contractual negotiation process. The enhanced liability clauses are a risk redistribution tool within the supply chain which contributes to higher total cost for the entire supply chain.



Research limitations/implications (if applicable)

The explorative research is primarily based on theoretical deduction because the trade secrets prevent analysis on current valid enhanced liability clauses and how these are used for risk allocation.



Practical implications (if applicable)

The research aims to provide a better understanding for why enhanced liability clauses has limited possibilities as both risk and cost reducing method.



What is original/value of paper This paper introduces the enhanced liability clauses in contracts as a risk allocation method and explains its limitations. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Chapter in Book/Report/Conference proceeding
publication status
published
subject
keywords
Risk management, Supply chain risk, Enhanced Liability, Freight forwarding, Logistics business strategy, Packaging logistics
in
[Host publication title missing]
pages
27 pages
publisher
NOFOMA
conference name
23rd annual NOFOMA conference, 2011
language
English
LU publication?
yes
id
a0f48541-df73-4e20-9137-d566503b53ad (old id 2968331)
date added to LUP
2012-08-13 12:50:04
date last changed
2016-04-16 09:11:41
@inproceedings{a0f48541-df73-4e20-9137-d566503b53ad,
  abstract     = {Purpose of this paper<br/><br>
The expression Enhanced Liability refers to clauses in a contract which obligation one of the partners to accept extended liability for future claims payments beyond normal standards of transport law, conventions or national standard terms and conditions for<br/><br>
logistics service intermediaries, logistics service providers and carriers. This paper provides explanations and understanding of how logistics business actors are using enhanced liability clauses in supplier contacts to reallocate their own risks.<br/><br>
<br/><br>
Design/methodology/approach <br/><br>
The research is based on a system-theoretical approach, which emphasizes a holistic view<br/><br>
instead of the characteristics of the different parts. The research method used in this paper is deductive. The analysis is based on complexity theory with regard to both the deductive framework and several interviews with insurance and security experts in logistics business.<br/><br>
<br/><br>
Findings<br/><br>
The usage of enhanced liability clauses in contracts is increasing and the exact content of each enhanced liability clause is determined in the contractual negotiation process. The enhanced liability clauses are a risk redistribution tool within the supply chain which contributes to higher total cost for the entire supply chain.<br/><br>
<br/><br>
Research limitations/implications (if applicable)<br/><br>
The explorative research is primarily based on theoretical deduction because the trade secrets prevent analysis on current valid enhanced liability clauses and how these are used for risk allocation.<br/><br>
<br/><br>
Practical implications (if applicable)<br/><br>
The research aims to provide a better understanding for why enhanced liability clauses has limited possibilities as both risk and cost reducing method.<br/><br>
<br/><br>
What is original/value of paper This paper introduces the enhanced liability clauses in contracts as a risk allocation method and explains its limitations.},
  author       = {Ekwall, Daniel and Nilsson, Fredrik},
  booktitle    = {[Host publication title missing]},
  keyword      = {Risk management,Supply chain risk,Enhanced Liability,Freight forwarding,Logistics business strategy,Packaging logistics},
  language     = {eng},
  pages        = {317--333},
  publisher    = {NOFOMA},
  title        = {Reallocation of risks within supply chains: The practice of enhanced liability clauses},
  year         = {2011},
}