Abstract
In the face of global competition and the coronavirus disease-19 (COVID-19) pandemic, the logistics service providers (LSPs) are facing severe challenges to attain their logistics performance indicators. To continue in such a market place, LSPs need to maintain a dedicated integration relationship with their clients by enhancing client special treatment benefits. The aim of this study is to apply the relational view (RV) theory and the relationship marketing (RM) perspective to examine the moderation effect of special treatment benefits on the link between logistics integration and LSPs’ logistics performance (i.e., cost leadership and customer services innovation). Data was collected from 214 Malaysian LSPs, and analysed using partial least squares-structural equation modelling (PLS-SEM). Although the results show that logistics integration has a strong impact on both performances, further analysis shows that a high level of logistics integration has an association with high levels of special treatment benefits (moderating effect), in turn, maintaining performance at a high level. The exploring of the moderation effect of special treatment benefits contributes to the RV theory by incorporating the RM to reflect the moderation effect. Additionally, the study contributes empirically to the field of strategy and RM within the LSPs’ industry. Finally, the findings enable LSPs to better allocate resources to ensure more effective value-based strategies that emphasise on client special treatment benefits to develop financial confidence and maintain long-term dedicated relationships, so as to achieve the target outcomes.
Highlights
Logistics, and the broader concept of supply chain management, alludes to the business function of providing goods in the required amount and cost at the required time and spot (Karia, 2011; Speranza, 2018)
To explore whether the special treatment benefits significantly moderate the relationship between logistics integration and logistics performance i.e., cost leadership and customer services innovation, the interaction effect of special treatment benefits was added to the model using Smart-PLS based on the two stage-approach (Chin, Marcolin, & Newsted, 2003)
The results reveal that an increase in the level of special treatment benefits will strengthen the relationship between logistics integration and logistics performance, in terms of cost and customer services innovation, which can be seen in the graph of slope analysis (Figure 4 - A and B)
Summary
The broader concept of supply chain management, alludes to the business function of providing goods in the required amount and cost at the required time and spot (Karia, 2011; Speranza, 2018). LSPs need to optimize their operations, and more importantly, improve their resources through proactive and innovative supply chain practices in logistics integration, so that their position is better than their competitors (Arvis et al, 2018; Karia, Wong, Asaari, & Lai, 2015; Kumar, 2017; Liu & Lee, 2018). As the world acclimates to the new normal as required by the pandemic, the logistics integration model is insistently required to leverage logistics resources to have an efficient movement of goods, thereby contributing to competitive advantage and sustainability (Karia, 2019; Wang, Persson, & Huemer, 2016), as well as for eventual economic recovery (Erna et al, 2019; Sharma, 2020). It has been suggested that previous studies may have created models that were oversimplified (linked integration directly to performance), neglecting the role of moderating or contingency factors (Ataseven & Nair, 2017; Wiengarten et al, 2019)
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