Managerial implications

This research has identified several major factors that influence a customer’s partnering behavior in its relationship with a 3PL. Based on the results of the

research, several recommendations can be made to 3PL managers:

Increasing a customer dependence on a 3PL. A 3PL can increase the depth of its partnerships with its customers by increasing customer dependence on its services. It was shown that when a customer perceives to be dependent on a 3PL, a customer exhibits higher levels of partnering behavior (H1). The level of a customer dependence on a 3PL will be a function of two main factors: a customer’s logistics capabilities and the degree to which a 3PL invests in the relationship. The results of the model indicated that there is a negative relationship between a customer’s internal logistics capabilities and customer dependence on a 3PL. The key idea is that a 3PL should carefully protect its core competencies. If a customer perceives to fully understand how to perform those activities outsourced to the 3PL, it will perceive to be less dependent and exhibit a partnering behavior to a less degree. This increases the likelihood that a customer will quit the relationship for an alternative 3PL and contract less of the focal 3PL services.

Secondly, as counterintuitive as it may sound, the results from this dissertation suggest that a 3PL should invest in a relationship (H16) in order to increase customer

dependence. This might be either because the investments increase customer loyalty, or because the customer perceives that no other 3PL may be willing to invest in the relationship. A 3PL that invests in a relationship may feel appreciated by its

customer. These investments do not necessarily need to be in physical assets. They can be related to training of transactional activities related to the operations between 3PL and customer, or processes developed exclusively for that particular relationship.

It is relevant to note that there was no evidence found that competitive pressures in the customer industry, or that complexity of customer operations, or availability of other 3PLs, impacts a customer’s perceived dependence on a 3PL. Therefore, in order to increase a customer’s perceived dependence, a 3PL should focus on its capabilities and investments in the customer relationship.

Increasing customer trust in a 3PL. The model results indicate that there is a positive relationship between a customer’s perception of a 3PL’s benevolence and a customer’s partnering behavior (H4). Therefore, it is crucial for a 3PL representative to make an effort to develop personal and interactive relationships with its customers.

Personal relationships may be emphasized in many areas of a 3PL’s activities, including those that deal with customer issues or complaints (e.g., the marketing department and call-center). Several semi-structured interviews were conducted with Rapidão Cometa’s customers. During the interviews, it was emphasized how

important the weekly visits from Rapidão Cometa’s representatives were for the customers. The customers argued that Rapidão Cometa was responsive when problems arose, such as late shipments. They pointed out that it was important to

know that someone from Rapidão Cometa was paying attention to their problems and working to solve them.

Aside from working on interpersonal interactions with customers, one way to increase a customer’s perception of a 3PL’s benevolence is by investing in the relationship. It was shown that there is a positive relationship between 3PL transaction-specific investments and 3PL benevolence. Transaction specific

investments are a demonstration of concern and care for the relationship. Therefore, if a 3PL invests in the relationship with a customer, the customer will not only perceive itself to be dependent on the 3PL, but will also trust the 3PL.

An important means of increasing a customer’s perception of a 3PL’s credibility is by increasing the 3PL’s reputation. A positive relationship was found between a 3PL’s reputation and its customer’s perception of the 3PL’s credibility.

Reputational advertising may help here. In addition, reputation may spread through word-of-mouth. One of the customers interviewed said that his company chose Rapidão Cometa based on conversations with managers from other firms who already worked with Rapidão Cometa.

Finally, it is crucial that a customer is satisfied with the services provided. The model results show that satisfaction with outcomes of the relationship build trust that in turn shapes a customer’s partnering behavior with a 3PL. During the interviews, on-time performance, freight visibility through a satellite tracking system, and cargo integrity (i.e., absence of damage and spoilage) were clearly the main factors that customers used to evaluate Rapidão Cometa’s performance.

Knowing a 3PL customer. The model results showed that a customer

relationship marketing orientation and a customer’s prior experience with partnering had strong positive impacts on partnering behavior. These findings are particularly important for a 3PL when deciding whether to start working a new customer. A customer’s own marketing strategies and philosophies of relating with business partners will influence the quality and dynamics of its relationship with the 3PL. A 3PL should try to understand how a customer relates to its own customers. If the customer firm’s strategy focuses on nurturing mutually beneficial relationships with its own customers, it is more likely that the customer will do the same with the 3PL.

In addition, a customer’s experience with other 3PLs will shape its expectations in the present relationship. Therefore, it is recommended that 3PLs investigate a customer’s prior experiences with other 3PLs. If a customer has any prior experience partnering with other 3PLs, it may have more realistic expectations with the current service level.