Please use this identifier to cite or link to this item:
|Document Type: ||Thesis or dissertation|
|Title: ||Value proposition in international freight : the contribution of the freight forwarder to the global logistics triad|
|Authors: ||Ford, Richard|
|Supervisors: ||Wright, D.|
|Issue Date: ||Jun-2001|
|Abstract: ||The freight forwarder has been threatened with 'disintermediation' for
years. This research looks at the relationships in the global logistics triad
comprising the forwarder, the shipper, and the airline or ocean carrier.
The middle-man in service industries such as freight forwarding performs
the service of intermediation. He is defined as one who reduces or
eliminates the need for a buyer to form exchange relationships, ad hoc or
relational, with a number of suppliers by concentrating the buyer's need for
information at the buyer interface and expanding the buyer's requirement
for choice or selection at the supplier interface.
This vendor contraction and expansion are explored in the qualitative first
phase of the research which examines the relationships, shared functions,
and roles of the members of the global logistics triad as well as the
contribution of the freight forwarder. Modal differences are prominent.
Shippers are closer in a relational sense to ocean carriers than to airlines
- the exporter is much more likely to use a shipping line directly than to
use an airline. This modal difference owes much to the airfreight
industry's origins in passenger transportation. It is reflected in the airlines'
perspective of the forwarder: as customer because of forwarders'
purchase of space, as competitor because the airline is being excluded
from dealing directly with the shipper, and as collaborator because of the
common threat of the integrator. To the ocean carrier, the forwarder is
customer and competitor only - collaboration is rare.
Factors that affect the custome r/competitor/colla boratort richotomy in
airfreight include freight capacity, the level of forwarder commitment to
space, the status freight has with the airline, and the makeup of the
airline's customer portfolio. The factors that affect the customer/
competitor dichotomy in ocean freight include the extent of LCL (Less than
Container Load) cargo and 3PL (3rd Party Logistics) services offered by
the shipping line.
The modal differences and complexities inherent in the global airfreight
triad were explored in the subsequent quantitative phase. What value
does the airfreight forwarder offer to the shipper that would compel him to
not disintermediate this intermediary and deal directly with the airline? It is
surmised the forwarder offers value through cost reduction, specifically the
costs of transacting with a number of airlines.
This second phase is based on Transaction Cost Analysis using an
experiment-derived survey instrument. The transaction costs of searching
for vendors, developing relationships with them, monitoring their
performance, handling problems that may arise, and managing potential
opportunistic behaviour were examined. The shi pper- respondents - made
up of British global exporters who used airfreight - were asked to compare
their perception of these costs for the forwarder and for the airline. They
were also asked about production cost/price advantages as well as
demographic information that was presumed to affect these perceptions.
The differences between these perceptions of transaction costs were
highly significant with the perception of offering lower transaction costs,
and hence greater value, lying with the forwarder. The shippers also
positively viewed forwarders regarding the production cost/price
advantages. However, the demographic variables played little part in the
shippers' differential perceptions of transaction costs.
Contribution is made to Transaction Cost Theory by suggesting the
inclusion of triadic relationships and the intermediary as a governance
alternative. In addition, the freight forwarding industry and global
distribution benefit. Finally, at the level of method, the TC comparison
technique used offers a fresh approach to comparing primary and
|Appears in Collections:||PhD, DBA, and MSc by Research theses (School of Management)|
Items in CERES are protected by copyright, with all rights reserved, unless otherwise indicated.