Logistics service quality in an emergent market in Latin America

• DOI: https://doi.org/10.1108/IJLM-11-2020-0433
• Published date: 22 September 2021
• Date: 22 September 2021
• Pages: 79-101
• Subject Matter: Management science & operations,Logistics
• Author: Marek Michalski,José Luis Montes-Botella

Logistics service quality in an

emergent market in Latin America

Marek Michalski

College of Business Administration, San Francisco de Quito University,

Quito, Ecuador, and

Jos

e Luis Montes-Botella

Applied Economics I, Rey Juan Carlos University, Madrid, Spain

Abstract

Purpose –This paper aims to determine how the level of logistics service quality facilitates logistics

performance in emerging markets. The authors chose Ecuador because it is an emerging economy with

relatively stable economic development, making it an attractive research platform in a challenging

environment for logistics services. The authors empirically test the influence on performance and one another

of five dimensions of service quality: reliability, responsiveness, empathy, assurance and tangibility.

Design/methodology/approach –SERVQUAL and partial least squares structural equation modeling was

undertaken to test the proposed relationships empirically.

Findings –The performance was positively related to assurance, tangibility and reliability but negatively

related to the responsiveness and empathy dimensions. The findings suggest the order of priority for

improvement actions. The findings highlightthat the existing relationships in developed markets do not apply

in the same manner in emerging markets.

Research limitations/implications –Although representative, data were only collected in one specific

market.

Practical implications –The results reveal a mix of activities that managers should develop to improve the

services they provide, relationships with customers and performance.

Originality/value –Few other works have explored logistics service quality in South America’s emerging

markets. According to contingency theory, various combinations of service quality dimensions can influence

performance, suggesting that managers should aim for optimal fit between dimensions according to internal

and external situations. An efficient and effective combination in one case may be unsuccessful in another. The

approaches presented can improve relationships within global supply chains, especially regarding logistics

management.

Keywords Logistics service quality, SERVQUAL model, Performance, South America

Paper type Research paper

1. Introduction

With globalization characterized by unpredictable new market trends and unstable customer

behaviors, competence-based on-time logistics has significantly changed business operations

(Bouncken et al., 2015). Consequently, logistics management is becoming a critical component

of organizational management processes and conte mporary supply chains (Sanchez

Rodrigues et al., 2015).

In many cases, organizations make necessary changes to their logistics activities to

maintain or increase their competitiveness. Thus, logistics is a strategic tool that allows

companiestofaceadversesituations, create competitive advantages, increase customer

value and achieve collaborative advantage within supply chains (Lee et al., 2016). From

this perspective, logistics is a proactive means to take advantage of a challenging

environment.

Logistics operates on two planes. The first is the proper organization structure and the

design of a supply chain network to tackle the rising logistics costs and complexity of

operations management in current conditions (Michalski et al., 2017). The second is the

strategic deployment of logistics activities to increase performance. These two planes are not

exclusive: choosing a strategy for designing the structure and management processes could

Logistics

service quality

79

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/0957-4093.htm

Received 3 August 2020

Revised 30 March 2021

7 July 2021

23 August 2021

Accepted 29 August 2021

The International Journal of

Logistics Management

Vol. 33 No. 1, 2022

pp. 79-101

© Emerald Publishing Limited

0957-4093

DOI 10.1108/IJLM-11-2020-0433

simultaneously improve the performance and competitiveness of logistics activities (Fugate

et al., 2010;Stank et al., 2001).

These outcomes can only be realized if organizations provide logistics activities of

sufficient quality to meet customers’expectations. The quality of logistics activities is widely

recognized as key to organization profitability and customer satisfaction (Ding et al., 2014;

Juga et al., 2010;Mauri et al., 2013). However, managers face the ongoing problem of knowing

to what extent the offered and provided logistics services meet customers’expectations. To

solve this problem, the quality of logistics services must be continuously measured (Rafele,

2004) and compared against sectorial standards (Thai et al., 2014), reflecting best practices for

managing these processes.

Organizations assess the quality of the logistics services they provide to customers

(Kilibarda et al., 2016). Although this is valuable knowledge, improving quality is impossible

without knowing if internal processes are sufficient to attain the desired quality level. High

logistics service quality (LSQ) may increase responsiveness to environmental changes due to

improved visibility and operational knowledge (Lee et al., 2016), especially when there is high

instability in external relationships.

According to contingency theory, it cannot expect to define one universal set of optimal

recommendations for all organizations (Ginsberg and Venkatraman, 1985), and managers

must consider various contingencies that affect logistics performance in the different

business environments. As global activity continues rising, logistics is increasingly viewed

as integral to diversifying and shortening supply chains and simplifying their complex

management processes. Accordingly, logistics services will be differentiated by their quality

level and acquire high value, especially in short supply chains.

This operational challenge is especially important for global and Latin American firms.

The changes in business markets and the need to operate with shorter supply chains could be

considered an excellent opportunity for them. However, most studies of logistics services

have focused on developed markets (Rafiq and Jaafar, 2007;Rahman, 2006;Saura et al., 2008;

Thai, 2013). Given the business opportunity for Latin American firms, research on how to

approach quality in business processes is especially timely (Amat-Lefort et al., 2020;Paul and

Mas, 2019;Su and Sampaio, 2012;Vergara and Maza, 2018). This gives rise to the following

research questions:

RQ1. How can logistics performance be improved in emerging markets of South

America?

RQ2. What combination of quality dimensions is associated with superior logistics

performance in emerging markets of South America?

In recent years, most Latin American countries have strengthened export-led growth

strategies. The existing logistics framework underpins these strategies’success by providing

the infrastructure necessary to move products and services. However, success is highly

dependent on logistics costs. The level of logistics costs is directly related to the quality of

services provided. The costs of second deliveries, delays and inaccurate order preparation are

especially relevant.

The South American region still lags in developing an effective logistics infrastructure

and framework. Macroeconomic stability is necessary to attract investment, while access to

markets is essential to developing a serious export strategy (Guasch, 2011). Ecuador is a

strategic and diverse market with high potential for developing logistics activities involving

especially multimodal transport (air, sea and land). In 2019, logistics services worth US$1,238

million were demanded, which local companies could not fully cover. This unmet demand

allows international logistics companies to invest in the country. Due to its location, Ecuador

could be a platform to access the main export markets of the United States or Europe for

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