Customer Satisfaction of the Third-Party Logistics Enterprise Based on AHP: A Case Study

Customer Satisfaction of the Third-Party Logistics Enterprise Based on AHP: A Case Study

Xu Xiaomin (Shanghai Dianji University, Shanghai, China) and Liu Yi (Shanghai Dianji University, Shanghai, China)
DOI: 10.4018/IJISSCM.2017010105
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Abstract

This article reports on results of a study on a freight forwarding enterprise engaged in third-party logistics services. The first phase involved establishing an evaluation index system for customer satisfaction of 3PL enterprise based on SERVQUAL model. In phase two, analytic hierarchy process AHP is applied to analyze survey results to find out key factors affecting service quality of 3PL enterprises. Based on these results, some suggestions are given.
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Introduction

In recent years, with widespread use of the Internet, customer satisfaction in logistics industry has drawn close attention from academics and practioners both at home and abroad. In addition to cost savings, logistics is playing an important role in improving customer services and helping companies to gain competitive advantages. Today, third party logistics industry in foreign logistics market accounts for a considerable proportion. According to statistics, 3PL enterprises account for 23.33% of logistics market in Germany. In other European Community countries, 3PL accounts for 10% to 35%. In the United States, 3PL accounts for 57%. In Japan where best social distribution service is provided, 3PL accounts for 80%. In the middle of 1990s, 3PL has made progress in China. According to 2006 China Logistics Development Report, during 1999-2005, manufacturing companies that outsource to 3PL providers have increased from 5% to 31%, manufacturing companies with self-conducting logistics have dropped from 26% to 16%, while combination of self-conducting logistics and outsourcing has dropped from 69% to 53% (China Federation of Logistics and Purchasing, 2006). With rising demand of logistics outsourcing and development of e-commerce, average annual growth rate of 3PL is 33%, and during 2004-2010, total production value increased from 40 billion RMB to 230 billion RMB. However, overall customer satisfaction of China's 3PL enterprises is not optimistic. According to China Storage Association’s Supply and Demand Investigation Report, satisfaction level of manufacturing companies for 3PL is 54%, 35%, 44%, and 25% in 2001, 2003, 2004 and 2005, showing that 3PL satisfaction levels in manufacturing industry are volatile. Meanwhile, it also shows that many 3PL enterprises have not paid attention to customer satisfaction.

At present, logistics market potential in China is tremendous, its prospect is very attractive, and logistics industry is rapidly growing. A statistics show that in the total social logistics of China in 2012 is 177,300 billion RMB, year-on-year growth is 9.8%. The ratio of total cost of society logistics of gross domestic product is 18%, and the added value of logistics industry is 3600 billion RMB (Li, 2004; Tong, 2007). These figures show that service demand for logistics in enterprises and society is increasing, logistics industry is developing rapidly, and logistics markets are in the process of steady and rapid growth. However, 3PL as an emerging industry, with advancement and economy, is playing an important part in the whole logistics industry, is one of the important direction of modern logistics. To a certain extent, 3PL determines direction and the degree of development of logistics industry. Although logistics industry is gradually rising to national strategic level and the main economic indicators are steady growing, we must clearly recognize that the logistics industry in China, especially 3PL, still faces many problems and difficulties, still need to continuously reform and develop. Problems such as high total cost of logistics, confused market order of logistics, low proportion of 3PL, and poor service abilities of 3PL enterprises are universal (Dai,2007; Gong, 2008).

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