Recent interest in logistics and physical distribution has fueled a move to position such activities as mainstream marketing functions. Transportation has been of particular interest due to the changes in the regulatory environment in the United States in the last decade. The changes have resulted in an extremely competitive market facing the carriers, and have provided shippers with a strategic opportunity to use physical distribution as a competitive tool in the marketplace.

Research in the past in the area of transportation purchasing has focussed on identification of carrier characteristics that are considered important in the selection process. The present study viewed purchasing of transportation as an organizational service buying phenomenon. The carrier selection decision was viewed within the framework of the Sheth (1973) model of industrial buying behavior.

Organizational characteristics, environmental variables and source loyalty toward existing Carriers were empirically investigated to determine their influence on the locus of the shippers carrier selection decision. The impact of the variables above on the development of criteria for carrier selection was also investigated. The impact of shippers' source loyalty toward existing carriers on the buyclass variable, and the decision outcome were also investigated.

Organizational variables such as terms of shipment used, nature of firms business, and usage of intermodal carriage were found to have significant relationship to the locus of the carrier selection decision. Among environmental variables, sources of information that were utilized had a significant relationship to the locus of the carrier selection decision. Source loyalty toward existing carriers was found to be positively related to the frequency of purchase situations that were classified as routine purchase. Carrier selection criteria used by shipper firms were found to differ as the firms differed in their organization characteristics and environmental variables facing them.

The results of the study provide an empirical test of a portion of the industrial buyer behavior model (Sheth 1973). The results provide carrier companies with tools to segment their potential market, and knowledge of the shippers carrier selection decision process.