Academic journal article Journal of Transportation Management

Examining International Freight Forwarder Services: The Perspectives of Current Providers and Users

Academic journal article Journal of Transportation Management

Examining International Freight Forwarder Services: The Perspectives of Current Providers and Users

Article excerpt

INTRODUCTION

International freight forwarders (IFFs) are key specialists in cross-border trade. They can provide a variety of services, and are used by the great majority of companies engaged in international commerce (Johnson and Wood, 1996). Despite the important role of IFFs in efficient cross-border trade, there is relatively limited empirical information about them.

The literature has suggested (Pope and Thomchick, 1985; Murphy, Daley, and Dalenberg, 1992a) that IFFs are small companies, often employing fewer than 10 people. IFFs are becoming more diversified in their customer offerings; many contemporary IFFs provide forwarding services for both air and water shipments, and a number also provide such multiple intermediary services as non-vessel operating common carrier service and customshouse brokerage (Murphy and Daley, 1995).

Moreover, the rapidly changing global business environment has had important implications for the forwarding industry. More specifically, the forwarding industry has been characterized by tremendous volatility over the past decade (Ozsomer, Mitri and Cavusgil, 1993), as manifested in various acquisitions, consolidations, and bankruptcies. This volatility has led some to question the continued viability of smaller forwarders. Consider the following statement from the president of a smaller IFF (Gillis, 1996): Tm a firm believer that the smaller forwarder and broker will be extinct by 2000."

One of the key aspects in the future viability of individual IFFs is how well they can meet the needs and wants of current and future customers. While this philosophy essentially represents the marketing concept, providers of logistics services have not always embraced the notion of satisfying customer needs and wants, in part because logistics service providers have sometimes used a very narrow definition of "customer". As an example, international water ports (Murphy, Daley, and Dalenberg, 1992b) have appeared to understand the requirements of water carriers--traditionally considered to be the ports' primary customers--with respect to key factors in water port selection, but are not so well aligned with other customer groups such as shippers and international freight forwarders.

Furthermore, although the marketing concept stresses that service providers should satisfy customer needs and wants, the service quality research has identified a variety of gaps (Parasuraman, Zeithaml, and Berry 1985) between expected and perceived service quality, and that service quality is a key determinant of customer satisfaction. With this in mind, the present paper will examine IFFs and current users of IFFs with respect to various services which might be provided by IFFs. In so doing, the paper seeks to identify possible gaps between the services actually provided by IFFs and the services IFF users would like provided. In addition, because customer satisfaction is a desired output of service quality, the paper will report on IFF users perceived satisfaction with the general performance of the IFFs uBed by their respective companies.

METHODOLOGY AND PARTICIPANT PROFILES

The IFF information comes from a mail survey sent to IFFs identified in The Official Directory of Transportation Middlemen (now, The Official Intermodal Guide). Of 336 eligible IFFs, usable responses were received from 98, for an effective response rate of 29.2%. Nearly two thirds of the responding IFFs reported annual revenues of less than $10 million, a finding consistent with previous IFF research (Pope and Thomchick, 1985; Murphy, Daley, and Dalenberg, 1992a). Approximately 75%of the respondents classified themselves as a Vice President, President, CEO, or Owner. These senior-level managers should be quite familiar with the services provided by their companies.

The user information is drawn from a mail survey of 370 randomly selected members of the Council of Logistics Management (CLM). …

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