The antecedents and consequences of supply chain service capabilities in the context of container shipping

Published date08 August 2016
DOIhttps://doi.org/10.1108/IJLM-09-2014-0151
Pages236-262
Date08 August 2016
AuthorChung-Shan Yang
Subject MatterManagement science & operations,Logistics
The antecedents and
consequences of supply chain
service capabilities in the context
of container shipping
Chung-Shan Yang
Department of Aviation and Maritime Transportation Management,
Chang Jung Christian University, Tainan City, Taiwan, ROC
Abstract
Purpose The purpose of this paper is to empirically examine the relationships among supply chain
integration (SCI), supply chain service capabilities, market performance (MP), and financial
performance (FP) in the container shipping context and develops valid and reliable instruments for
future research.
Design/methodology/approach A structured questionnaire was used to gather data from
133 container shipping operators and agencies in Taiwan, using confirmatory factor analysis, the
author identified main dimensions of SCI and supply chain service capabilities in container shipping
context. A structural equation model was then used to test the research hypotheses.
Findings This study has identified a set of five dimensions that can enable effective SCI: top
management support, cross-functional cooperation, information technology, goal congruence, and
collaborative communication, and highlighted the critical mediating role of supply chain service
capabilities (i.e. service efficiency, service reliability, service flexibility, and value-added service) in
improving firmsmarket and FP. The authors confirm that SCI has a positive impact on supply chain
service capabilities, which in turn helps to enhance market and FP.
Practical implications This research can thus serve as a valuable reference for managers to
achieve better SCI formation and performance, help managers to develop more effective collaborative
relationships, and thus minimize the chance of SCI failure.
Originality/value This manuscript provides a theoretical framework to link SCI, supply chain
service capabilities, MP, and FP for the container shipping service supply chain context that have not
been previously reported through empirical research.
Keywords Firm performance, Supply chain integration, Structural equation model,
Container shipping, Supply chain service capabilities
Paper type Research paper
Introduction
Ocean liner shipping companies play a prominent role in facilitating international
trade, not only by enabling the physical transport of cargo but also through their
involvement in the commerce and marketing of global trade. To minimize system-wide
costs and satisfy service-level requirements, shippers and consignees require cargo to
be distributed in the right quantities, at the right locations, and at the right times.
Competition in the container shipping industry is largely between supply chains (SCs)
rather than between individual entities within the SCs (Lam and Van der Voorde, 2011).
In the maritime transport industry, cooperation and integration are becoming more
critical than competition in determining efficiency (Midoro et al., 2005). Supply chain
The International Journal of
Logistics Management
Vol. 27 No. 2, 2016
pp. 236-262
©Emerald Group Publishing Limited
0957-4093
DOI 10.1108/IJLM-09-2014-0151
Received 23 September 2014
Revised 28 March 2015
8 October 2015
Accepted 11 December 2015
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0957-4093.htm
This research was sponsored by the National Science Council, Taiwan, ROC under NSC 101-2410-
H-309-018.
236
IJLM
27,2
integration(SCI) in container shipping involvesa network of shippers, freightforwarders,
shipping carriers, port logistics service providers, and agents who perform various
value-added activities, usually sequentially, to add value for consumers (consignees).
In terms of horizontal integration, liner shipping alliances and cooperation continue to
play a central role in the operation and long-term viability of liner shipping companies.
Numerous shipping lines have undertaken vertical integration, diversifying operations
and services intovarious components throughouta multimodal SC system (Heaver,2002;
Panayides and Cullinane, 2002). Panayides and Cullinane (2002)suggested that empirical
investigation of the strategy-performance relationships related to such integrations is
needed. Research has indicated that an increasing demand for integrated logistics and
transport service renders maritime transport and port operation inseparable from
logistics and SC management (Panayides, 2006). According to an empirical study
conducted by Francand Van der Horst (2010), the threeleading liner shipping companies
in the world, Maersk, the Mediterranean Shipping Company (MSC), and CMA-CGM,
controlled 33.4 percentof the global TEU-capacity in 2007; in addition,they are the main
liner shipping companies involved in thehinterland. Consequently, an emerging trend in
liner shipping isintegration and diversificationinto inland transport, terminal operation,
and logistics (Panayides and Cullinane, 2002).
This study investigated whether a high level of SCI contributes to a high level of SC
service capability in container shipping. In terms of motivation, integrated container
shipping and logistics network, providing leading SC solutions and continually aspiring to
provide excellent customer experiences based on value-added, efficiency, flexible, and
reliable SC service capabilities. Several studies have investigated logistics-related
capabilities (Ariss and Zhang, 2002; Kylaheiko et al., 2002; Zhai et al., 2007; Robb et al.,
2008; Yang et al., 2009; Yeung et al., 2012); however, few studies have investigated the
relationships between SCI, SC service capabilities, market performance (MP), and financial
performance (FP) from an SC perspective. Furthermore, the main drivers of SC
development are usually container shipping companies; therefore, exploring the critical
factors determining container shipping SCI and SC service capabilities is necessary.
To enable assessing the extent to which a container shipping company is integrated within
an SC, an empirically validated measurement instrument is required. This study involved
examining the evaluation of antecedents and consequences of SC service capabilities.
One aim of this study was to develop utilization strategies for SCI and SC capabilities.
Because of the growth in foreign trade, the container shipping service industry in
Taiwan has become highly competitive, and the percentage of foreign maritime firms
entering the market has remained consistently high (Lu, 2007). Taiwan was ranked in
the United Nations Conference on Trade and Development (2014) report as having the
tenth-largest dead weight of vessels and the seventh-largest container port throughput
worldwide. Taiwans Evergreen Marine Corporation was the sixth-largest container
shipping operator worldwide, and two other Taiwanese operators were among the top
20. Foreign container shipping companies that have been established in Taiwan
include Maersk Line, Hanjin Shipping, MSC, K-Line, CMA-CGM, COSCO, and OOCL.
Because container shipping is an international industry, the findings of a study of
container shipping service in Taiwan can be applied to container shipping in other
countries. According to our research, the present study is the first to investigate how
SC service capabilities mediate the relationship between SCI and multiple measures of
firm performance in container shipping SCs. The remainder of this paper is organized
as follows. The following section presents a literature review and several propositions
are derived from the discussion. Third section explains the development of the research
237
Supply chain
service
capabilities

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