A Singapore-based consumer products company, the Best Manufacturing Group (BMG), intends to expand its sales network to the countries of Cambodia, Myanmar and Thailand. To maintain a lean in-house logistics team, BMG would like to engage a single third-party logistics (3PL) provider to manage all domestic transportation in these markets. The products involved would be mainly liquid soap and shampoo delivered by trucks from seaports or airports to warehouses and onwards to retail stores. The three countries are diverse in terms of economic maturity. For example, the domestic freight market in Thailand is much larger and more competitive than in Cambodia, whereas the market in Myanmar has even fewer large trucking firms. Cambodia and Myanmar are also more susceptible to global fluctuations in fuel prices, since they produce little or no crude oil domestically. BMG is preparing a request-for-quotation (RFQ) document for major international 3PLs to bid for the transportation contract. However, it knows that there is unlikely to be one provider that has the market presence or vehicle fleet to cover the entire geography. Hence, any 3PL eventually selected would almost certainly have to engage smaller trucking companies as subcontractors for a significant part of the operations. The Head of Logistics at BMG has proposed that the company should consider awarding a mix of separate "open-book" and "closed-book" contracts in these markets, depending on each country's unique conditions. Under this proposal, BMG would sign three separate five-year contracts with the winning 3PL, i.e. one contract per country but with the same 3PL.

(a) Give your views on the differences in the mechanisms of the open-book versus closedbook contracts in the context of the freight transport industry. (8 marks)

(b) Propose the type of contract that would be most appropriate for each of the three countries (i.e. Cambodia, Myanmar and Thailand). Give reasons to support your answer. (9 marks)

(c) For the country (or countries) in which you have recommended an open-book transportation contract, compose an argument for why such a contract would probably lead to more competitive bids, compared to the case if a closed-book contract had been used. (8 marks)