Accessing the Logistics Service Competitiveness: A Study on Four Emerging Nations in Southeast Asia

Accessing the Logistics Service Competitiveness: A Study on Four Emerging Nations in Southeast Asia

Le Anh Duy Tran (Ho Chi Minh City University of Economics and Finance, Vietnam) and Van Kien Pham (Ho Chi Minh City University of Economics and Finance, Vietnam)
Copyright: © 2021 |Pages: 14
DOI: 10.4018/IRMJ.2021040102
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Abstract

Recently, Southeast Asia (SEA) has become a very attractive region for FDI from developed countries. This trend has led to the rapid development of logistics services. However, in the existing literature, there is very little empirical research to compare SEA countries like for example Thailand, Vietnam, Indonesia, and The Philippines. Current studies mainly focus on a single country or some typical industries. Therefore, a comprehensive model with various attributes able to compare which country is performing a better logistics service is still missing. For this reason, the authors conducted this study with the expectation of providing a model that uses attributes able to make it easier to compare and evaluate the attractiveness of logistics services in each country. To do so, the paper uses AHP theory to set up the research model and a questionnaire to obtain data from 23 experts in the logistics industry. Based on an analysis of the results, Vietnam is the most attractive destination for logistics services. This finding was driven by the importance of the government-related attributes. Thailand because of the country's cost competitiveness proved attractive. The results of the study make it easier for managers to assess and select the best suited country for logistics services.
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1. Introduction

Four countries including Indonesia, Thailand, Vietnam, and The Philippines are becoming emerging economies in SEA. In recent years, FDI inflows into these countries have continued to increase (Lu, 2010). This has created a strong development of many industries, including logistics. Specifically, foreign investors are also constantly interested in the logistics markets in SEA. According to the forecast statistics of the World Bank, the Indonesian logistics industry is expected to increase by 15.4% in 2020, and Thailand, a new logistics center of the ASEAN (The WB, 2018), has logistics revenue by 96.5 billion USD in 2019. Meanwhile, Vietnam is expected to grow by 20% in 2020, which is the highest rate in the region. Finally, the Philippines is expected to grow by 15.6% in 2020 to reach 6.77 billion USD. According to the World Bank's LPI (Logistics Performance Index) in 2018, Thailand, Vietnam, Indonesia, and the Philippines rose to the 32nd (3.41), 39nd (3.27), 46nd (3.1), and 60nd (2.78) places, respectively as shown in Figure 1. The statistics show that these four countries are relatively similar in terms of logistics developments in recent years.

Figure 1.

Overall logistics performance index- Global ranking of four countries. Source: Data from the World Bank, 2018.

IRMJ.2021040102.f01

Over time, there have been many studies on logistics in SEA areas such as Bhatnagar et al., (1999), Lee and Yang (2003), Tongzon (2007), Khan (2019), etc. However, these works are mostly focused on the technical aspects of logistics (Lee and Yang, 2003). Additionally, some studies focus on a single country (Ülgen and Forslund, 2015; Chao and Li, 2012) or several occupations within that country (Bhatnagar et al., 1999; Lee and Yang, 2003). This creates a big gap in the existing literature when missing a model that includes various attributes to compare logistics services performance among countries. Thus, to the best of our knowledge, it would be necessary to provide a study to address this research grab to help decision-makers in the logistics sector compare and make decisions quickly.

In so doing, the research paper will apply the AHP theory provided by Saaty in 1980 as this model allows to arrange criteria to evaluate the attractiveness of logistics service destinations according to levels from left to right, with the highest level of being “the objective”, level 2, 3 showing “the main and sub-attributes”, and level 4 including “four nations” (Indonesia, Thailand, Vietnam, and the Philippines) as shown in Figure 2. Once the model is completed, it will be easier for logistics experts to make their assessments over the given attributes.

The results of this study provide empirical evidences based on the evaluation of 23 experts in the given field of four countries. More specifically, which criteria are mainly considered by the experts are also discovered. Thus, the research will be a very valuable reference to help managers more easily in their evaluation, selection, and decision-making process. In addition, researchers in the field can also use this research for future in-depth research.

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