4 ■ SERVICE, VALUE AND RELATIONSHIP: A CONCEPTUAL FRAMEWORK

Based on the concept of logistics services and strategies, Lu (2000) investigated the differences of service attributes between implemented logistics and non-implemented logistics service attributes in Taiwanese maritime firms. Through statistical analysis, it was found that value-added service strategy, and equipment and facilities strategy were significantly different. Moreover, in both categories it was indicated that 9 out of 33 logistics service attributes were found to be regarded as significant for shippers. These were: good financial conditions, high frequency of sailing, on-time pick-up, courtesy of inquiry, prompt response to claim, good condition of containers, ability to provide computer system for cargo tracing, ability to provide door-to-door service, and ability to provide customs clearance service.

As Multimodal Transport aims to provide door-to-door services (UNCTAD, 1995), services such as computer system for tracing, frequency of departure and on-time pick­ up are often used to ensure the reliability of MTS (UNCTAD, 1999; Islam, et a l 2005). Similar to Lu’s (2000) logistics service attributes, UNCTAD’s report of Development of Multimodal Transport and Logistics Services (2003) also highlighted that the responsiveness to shippers’ service demand reflects the capability of MTO’s customer service capability in terms of courtesy of inquiry, prompt response to claims, condition of containers, just-in-time (JIT) and customs clearance services.

Lai, et al (2002), building on Churchill’s (1979) paradigm of marketing constructs as supply-chain performance measurements in transport logistics, a total of 26 measurement items were used to evaluate supply-chain performance in transport / logistics-related companies in Hong Kong. These items were categorised into three dimensions namely: service effectiveness for shippers, operations efficiency for transport / logistics service providers and service effectiveness for consignees. They have found that within these three dimensions, accuracy of documentation, response to shippers’ requests, tariff flexibility and quality of data transmission are significant logistics service measures. In addition, their results show that these attributes could pin­ point a particular attribute which needs improvement actions.

Lu (2003) sought to understand the impact of carrier service attributes on shipper- carrier partnering relationships from a shipper’s perspective. He used statistical modelling to measure the impact of service quality on shippers’ satisfaction and

4 ■ SERVICE, VALUE AND RELATIONSHIP: A CONCEPTUAL FRAMEWORK

partnering orientation. The result has shown that time-related factors were significant predictors of shipper’s satisfaction. Items that were used in measuring time-related service attributes were: availability of cargo space, accurate documentation, prompt response to claim, short transit time, high frequency of sailing, on-time pick-up, reliability of advertised sailing, and service coverage. In Hayuth (1987), Kindred, et al (1997) and Wood’s (1998) research on Multimodal Transport, these service attributes has been frequently referred to as responsibilities of a MTO in the commercial arrangements of any particular Multimodal Transport operation; however, they have never been explicitly measured.

Lai (2004) examined the service capability of logistics service providers (LSPs) from the perspective of the resource-based view (RBV). RBV, originated by Wemerfelt (1984), is an economic tool, which suggests that firm resources and capabilities are the driver of competitive advantage. Twenty-four logistics service attributes were developed to measure service quality of LSPs. The result indicates that LSPs can be classified into four types according to their service capability, namely: Traditional Freight Forwarders (TFF), Transformers (TMR), Full Service Providers (FSP) and Nichers (NCR). It was found that each type of LSPs positions itself differently (Table 4.3). It was suggested that understanding of these service capabilities would be crucial in understanding and identifying logistics service qualities.

Jharkharia and Shankar (2007) examined relevant criteria in selection of LSPs through an analytic network process (ANP) methodological approach. ANP is a comprehensive decision-making technique that includes multiple criteria in arriving at a decision. They applied a nine-step ANP methodology on six selected shippers and identified their rationale for selecting potential LSPs. The results indicate that a compatibility factor between the shipper and the LSP was the most important determinant, followed by cost, reputation and quality. In addition, they suggested that investment in long-term relationships can be expensive but may help to reduce the risk of investment decisions. In Paixao-Casaca, et al.'s (2009) research on logistics strategies for short sea shipping operating as part of Multimodal Transport chains, similar attributes such as: relationship policies, reputation, cost, service guarantee and reliability was also found as essential competitive strategies. Thus, reflect the similarities of attributes between logistics services and MTSs.

4 ■ SERVICE, VALUE AND RELATIONSHIP: A CONCEPTUAL FRAMEWORK

Ta b l e 4 .3 : LSPs’ Po s i t i o n i n g St r a t e g i e s

LSP Types Positioning Strategies____________________________________________ “Cost leader” with focus on operational efficiency in freight forwarding services.

“Service expander” with focus on adding value by sharing resources between customers (Purchasing / procurement, cross-docking, fleet management).

“Service leader” by leveraging service capability to create superior service performance.

“Niche Specialist” by specialising in particular value-added services and NCR technology-enabled logistics services (i.e. track and trace, web-based linkages

and information system management).

Note:* TFF-Traditional Freight Forwarders, TMR-Transformers, FSP-Full Service Providers, NCR-Nichers.

Source: Adapted from Lai (2004)

Lu’s (2007) investigation of evaluating key resources and capabilities for liner shipping services has suggested that operational capability is perceived as one of the most important dimensions, followed by customer service, human resource management, information integration, pricing, purchasing, and financial management. Similar to Lai (2004), the RBV theoretical framework was used to identify the logistics service capabilities in liner shipping. He expressed the view that reliability of sailing, availability of cargo space, on-time pick-up, courtesy of inquiry, space control, container positioning, sailing schedule planning, information system, and financial management, are all important drivers to determine the performance o f an individual firm.

In Yang, et al. ’s (2009) research of examining the relationships between resources, logistics service capabilities, innovation capabilities and the performance of container shipping services, twenty-four logistics service attributes were identified and categorised into four groups, namely: value-added services, service reliability, relationship building, and information integration and flexibility. With the employment of a statistical modelling approach, they found that logistics service capability had a significant impact on the performance of container shipping companies. Further, as regards logistics service capability, attributes such as courtesy of sales representative, accurate price calculation, long-term contractual relationship with customers, reliability of booking space and accuracy of documentation were perceived as some of the most

4 ■ SERVICE, VALUE AND RELATIONSHIP: A CONCEPTUAL FRAMEWORK

important logistics service qualities. It was found that various types of attributes, which were deliberately framed to have significant impacts on logistics service, are slightly different under various types of research criteria, agenda and methods.

A considerable body o f literature in relation to the concept of logistics was found but only a few publications are found in relation to Multimodal Transport or transport in general. In order to capture the concept of transport service within the framework of Multimodal Transport, contextual analysis of white papers (i.e. UNCTAD, UNESCAP, ADB) was performed in parallel with logistics service-related journal papers (e.g. Lai,

et al. 2002; Lu, 2007; Yang, et al. 2009). According to the compiled list of services

(Table 4.4), they can be divided into three main groups: transportation, facilities, and communication and information. Adapting this, grouping using the work of Williamson,

et al. (1990), these three main groups of services can be viewed as dimensions of MTS

which portrays the capabilities of MTOs. However, to the best of author’s knowledge, these three dimensions have not been verified through any quantitative analysis. Referring to the MTS attributes, some items are revealed to have similar characteristics. For example, on-time pick up (item 2), transit time (item 3) and schedule reliability (item 4) are all related to ‘time’. Furthermore, availability of booking space (item 7) and frequency of schedule (item 8) might portray similar meanings. It is challenging to decide which aspects to keep or eliminate. Therefore, these 25 items will be tested and filtered through exploratory factor analysis (EFA) in Chapter 7.

This section has summarised the existing studies on logistics service attributes. It was found that various attributes found in the logistics service literature could be closely related with MTS. According to Banomyong (2000), there are several overlapping activities found in logistics, transport and Multimodal Transport due partly to their terminologies; but it should be noted that shippers’ service demand will lead to pursuit of competitiveness in MTSs.