|
Article Excerpt
Abstract
The world has changed a great deal since the most recent installment in the carrier selection criteria literature. The terrorist attacks of September 11th, the recession that followed, and a current business environment characterized by constrained transportation capacity are all likely to have changed the emphasis shippers place on attributes used to select carriers. First, the authors posit three selection criteria have grown more important in the post-September 11th world. Second, the benefits of utilizing the Theory of Reasoned Action to determine the most important selection criteria, and to identify the parties in the shipping organization who value these criteria, are explained. Third, results of an exploratory study demonstrating the usefulness of the Theory of Reasoned Action to predict carrier choice are illustrated. Implications and contributions to academic research and industry practice are then discussed.
**********
Following economic expansion in the late 1990s, the early twenty-first century began with a recessionary period primarily attributed to the "dot-com bust" and the attacks of September 11, 2001. The vulnerability of the U.S. transportation infrastructure, exposed through the attacks of September 11th, caused public and private entities to search for means of securing supply chains and making them more resilient in case of future disruptions. Furthermore, supply chain management came to the forefront in the 1990s as a way of reducing expenditures (Bowersox et al. 2002) and the recession of the early twenty-first century forced companies to find ways to cut costs. While recession has since been replaced by economic expansion, high fuel prices, increased insurance rates, and subsequent carrier bankruptcies have constrained the pool of carriers available to shippers (Douglas 2006). This led to a sellers' market, wherein surviving carriers have greater power to raise the rates they charge to shippers. The combination of cost-cutting initiatives, and subsequent increase in transportation rates, could potentially cause firms to place more emphasis on purchasing low-cost transportation service.
The increased emphasis on security, resiliency, and cost reduction could potentially lead to changes in the qualities desired by organizations when selecting carriers to transport goods. Much has been published in the past twenty years pertaining to the attributes shippers deem important when purchasing transportation services (Baker 1984; Chow and Poist 1984; Lambert, Lewis, and Stock 1993; Evers, Harper, and Needham 1996; Crum and Allen 1997; Evers and Johnson 2000; Kent, Parker, and Luke 2001; Premeaux 2002). This literature has informed carriers of the qualities they should emphasize from an operational and promotional standpoint in order to meet the needs of shippers. Despite its value, no study has been published that assesses the change, if any, in carrier selection criteria due to the increased national interest in security and preparedness. Furthermore, multiple parties often participate in making industrial purchasing decisions (Sheth 1973). No study that we are aware of has explicitly taken into account the influence of parties other than the key informant in the carrier selection decision.
This research re-examines carrier selection criteria in light of three key reasons: (1) an increased emphasis on reducing transport cost, (2) an increased need for carrier preparedness in case of unforeseen circumstances, and (3) an increased emphasis on supply chain security. We propose the use of Fishbein and Ajzen's Theory of Reasoned Action (TRA) model (Fishbein and Ajzen 1975) to assess shippers' intention to purchase transportation service from carriers with certain attributes. The TRA model determines if shippers intend to purchase transportation service from carriers who exhibit valued attributes, delineates the attributes that are most important to the individual making the actual transportation purchase, and determines the attributes that are perceived to be the most important to other salient members of the organization. Results are intended to guide carriers in their efforts to improve operational and promotional performance.
LITERATURE REVIEW
Changes to the geo-political and economic landscape are likely to increase the importance of certain carrier selection criteria. Carrier reliability has consistently been ranked at, or near, the top of desirable carrier attributes (Baker 1984; Chow and Poist 1984; Lambert, Lewis, and Stock 1993; McGinnis 1990; Murphy and Hall 1995; Evers, Harper, and Needham 1996; Crum and Allen 1997; Evers and Johnson 2000; Kent, Parker, and Luke 2001; Premeaux 2002) with cost of transportation service rated lower in most cases. This indicates firms generally are willing to spend more in order to obtain reliable service.
While precedence of reliability over transportation cost has remained fairly constant, the relationship of cost to other carrier attributes has not. In Murphy and Hall' s (1995) longitudinal analysis of articles comparing six carrier selection criteria, they found cost to be tied for fifth place in the 1970s, second place in the 1980s, and tied for third in the 1990s with respect to reliability (ranked first for all three periods), transit time, carrier considerations, shipper market considerations, and over, short, and damaged claims. Conceivably, the rank order of transportation cost to other carrier selection criteria will continue to change as time progresses.
The recessionary period of the early twenty-first century, and subsequent increases in transportation rates, may be the impetus for such change. During less profitable periods firms search for expenses that are easily cut. It is possible that one of the expenses may be transportation cost, and the priority firms place on obtaining lower transportation rates may increase. Firms may now place an even greater priority on lowering transportation costs due to the increase in transportation rates. Lambert, Lewis, and Stock (1993) found cost to be the fourth most important attribute used to select and evaluate carriers. Evers, Harper, and Needham (1996) found cost to be ranked lowest, or not significant, among the attributes they examined. The recessionary period of the early 1990s, and subsequent expansionary period of the mid 1990s, may have influenced the perceived importance of transportation cost in these two studies with cost found to be more important during a recession (Lambert, Lewis, and Stock 1993) than during economic expansion (Evers, Harper, and Needham 1996). We expect that due to the recessionary period of the early twenty-first century, and subsequent increase in transportation rates, cost of transportation service would become more important than it was found to be in recent studies.
Proposition 1: Transportation rates have increased in importance relative to other carrier selection criteria.
In the past, shippers have placed relatively little importance on the ability of carriers to respond to unforeseen circumstances such as those that occurred on September 11th. During this time, airports were closed and some municipalities placed restrictions on...
|
