Strategic partner evaluation criteria for logistics service provider networks

• Date: 13 May 2019
• Pages: 438-466
• Published date: 13 May 2019
• DOI: https://doi.org/10.1108/IJLM-07-2017-0178
• Author: Hella Abidi,Wout Dullaert,Sander De Leeuw,Darek Lysko,Matthias Klumpp
• Subject Matter: Management science & operations,Logistics

Strategic partner evaluation

criteria for logistics service

provider networks

Hella Abidi

Department of Information, Logistics and Innovation,

Vrije Universiteit Amsterdam, Amsterdam, The Netherlands

Wout Dullaert

Faculty of Economics and Business Administration,

Vrije Universiteit Amsterdam, Amsterdam, The Netherlands

Sander De Leeuw

Department of Information, Logistics and Innovation,

Faculteit Economische wetenschappen en Bedrijfskunde,

Vrije Universiteit Amsterdam, Amsterdam, The Netherlands and

Nottingham Business School, Nottingham Trent University, Nottingham, UK

Darek Lysko

Department of Information, Logistics and Innovation,

Faculteit Economische wetenschappen en Bedrijfskunde,

Vrije Universiteit Amsterdam, Amsterdam, The Netherlands, and

Matthias Klumpp

FOM Hochschule, Essen, Germany

Abstract

Purpose –The purpose of this paper is to establish criteria for evaluating strategic partners in a network of

logistics service providers (LSPs) to show how analytical network process (ANP) can be used to identify the

weights of these criteria on a case-specific basis, and to investigate whether the ANP model can be used as a

starting point to evaluate strategic partners for other LSP networks.

Design/methodology/approach –Based on a literature review of vertical cooperation, the authors develop an

overview of criteria for the evaluation of partners in a network of LSPs. The authors then apply ANP at LSP1 to

validate the criteria, identify weights for these criteria and to validate model outcomes. Furthermore, the authors

investigate whether the ANP model developed for LSP1 can be applied to another LSP with similar characteristics

(LSP2). In-depth interviews are used to draw conclusions on the modeling approach and the model outcomes.

Findings –The research shows that evaluation criteria for partners in vertical partnerships between

shippers and LSPs are applicable to LSP partners in horizontal partnership networks. The ANP model with

criteria weights provides a good starting point for LSPs to customize the evaluation framework according to

their specific needs or operating environments.

Originality/value –Limited research is available on evaluating LSP partners in horizontal partnerships. To

the best of the authors’knowledge, this paper is the first to bring forward horizontal LSP partner evaluation

criteria to develop an ANP model for LSP partner evaluation and to apply this to two cases, and to provide a

starting point for evaluating partners in similar horizontal LSP networks.

Keywords Europe, AHP, Logistics industry, Logistics services, Logistics clusters

Paper type Research paper

The International Journal of

Logistics Management

Vol. 30 No. 2, 2019

pp. 438-466

Emerald Publishing Limited

0957-4093

DOI 10.1108/IJLM-07-2017-0178

Received 6 July 2017

Revised 19 January 2018

31 July 2018

30 November 2018

Accepted 4 January 2019

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

www.emeraldinsight.com/0957-4093.htm

© Hella Abidi, Wout Dullaert, Sander De Leeuw, Darek Lysko and Matthias Klumpp. Published by

Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0)

licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both

commercial and non-commercial purposes), subject to full attribution to the original publication and

authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

438

IJLM

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1. Introduction

In recent years, many companies have been active in developing cooperative networks of

firms. Cooperation within a business network supports companies in reaching their goals, in

responding to market opportunities and in developing products with competitive prices and

high product quality (cf. Zacharia et al., 2009). In the airline industry, cooperation between

airlines in the form of a strategic alliance is increasingly being perceived as an essential

element of business networks (Liou, 2012). Networks among airlines like Star Alliance, Sky

Team and One World are made to attract more passengers, to expand networks, to provide

cost reductions and to take advantage of product and service complementarities such as

joint luggage handling, code sharing and gates and check-in counters (Liou et al., 2011).

In the maritime industry, networks of ocean liner shipping companies are also well known

(often referred to as the liner conference system (cf. Shashi Kumar, 1999)). These conferences

can focus on specific aspects, e.g., route-specific ventures, vessels sharing and slot sharing

agreements (Midoro and Pitto, 2000; Panayides and Wiedmer, 2011). Examples of these

global networks in the maritime industry are the shipping line alliances, such as CKYH

Alliance, the Grand Alliance and the New World Alliance (Panayides and Wiedmer, 2011).

Similar to other transportation sectors, logistics service providers (LSPs) active in road

transport and logistics engage more and more in forming networks with partner LSPs. This

type of cooperation is often referred to as horizontal cooperation and is aimed at reducing

activity costs through load consolidation, joint-route planning and group purchasing

(Pérez-Bernabeu et al., 2015, p. 586). LSPs also seek to exploit win-win situations (Pomponi

et al., 2015) and combine resources and competencies in their logistics networks by

cooperating horizontally (Raue and Wallenburg, 2013). Such cooperation with other LSPs

enables LSPs to offer more comprehensive service packages, to reach more customers, to

obtain more cargo, to use facilities more efficiently, and to develop and provide more

effective logistics solutions (Carbone and Stone, 2005; Cruijssen, Cools, and Dullaert, 2007;

Cruijssen et al., 2010) compared to what could be achieved individually (Pomponi et al.,

2015). Such cooperation also occurs even though companies may compete with each other.

In fact, Cruijssen, Cools, and Dullaert (2007, p. 135) show that the proposition that LSPs

cooperate on core activities was supported the strongest in their survey (75.9 percent of the

respondents agreed or strongly agreed with this proposition). Moreover, formal hypothesis

testing allowed the authors to conclude (Cruijssen, Cools, and Dullaert, 2007, p. 138) that

“Since smaller companies have smaller economies of scale and can thus operate less

efficiently individually, they could benefit from forming a coalition in order to compete more

effectively with larger companies.”Therefore, it becomes more and more crucial to evaluate

LSPs in horizontal partnership as a company’s position in the market is affected by the

performance and quality of its partners (Kannan and Tan, 2002).

So far, studies in the transportation industry on logistics partner evaluation have

predominantly been oriented toward evaluating vertical logistics cooperation among

strategic partners (i.e. the cooperation between an LSP and a shipper who owns the freight;

cf. Dickson, 1966; Weber et al., 1991; Geringer, 1991; Wang and Kess, 2006; Jharkharia and

Shankar, 2007; Büyüközkan et al., 2008; Ho et al., 2010; Chen and Wu, 2011). Martin et al.

(2018) argued that horizontal cooperation between LSPs in the transportation industry and

logistics industry is a fairly recent phenomenon; the research body on this topic is rather

limited. They state that several other horizontal cooperation aspects LSP networks,

especially at the strategic and management level (to which LSP partner evaluation in an LSP

network belongs), are still scarcely researched. With regard to strategic partner evaluation,

the literature contains only few studies from the transportation industry that focus on how

to evaluate a horizontal partner. These scarce studies typically use evaluation criteria that

are derived from vertical cooperation. Examples are Liou (2012) and Liou et al. (2011), who

evaluated strategic alliances in the airline industry using criteria from vertical cooperation.

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Strategic

partner

evaluation

criteria