Shippers’ Choice Behaviour in Choosing Transport Mode: The Case of South East Asia (SEA) Region

Abstract

Using South East Asia as a case study, shippers’ choice of transport modes taking into consideration their economic and environmental impacts was examined in this research. A triangulation of both quantitative and qualitative methods was deployed. First, a quantitative analysis using secondary data was conducted to establish the index score, which includes four quantitative factors (transport distance, cost, time, and CO2 emission), for each transport mode. In addition, in order to examine at what level of the importance weight shippers would change their decision on transport mode, a sensitivity analysis involving the four aforesaid factors was also conducted. Next, an in-depth interview with a major shipper in Singapore was also carried out to qualitatively validate the aforesaid four quantitative factors as well as two additional qualitative factors, namely, customer service and shipper-forwarder relationship in relation to shipper’s choice. The results from this study indicate that shippers might change to the short-sea shipping (SSS) mode when the importance weights of cost and CO2 emission increase, and to trucking mode when the weight of time decreases. It was also found that cost is the most important factor when shippers choose carriers/forwarders, whereas CO2 emission is not an important factor at the current stage. However, if the government imposes financial measures such as fine and/or tax for CO2 emission, shippers would choose eco-friendlier transport modes. This research is the first study considering the environmental issue as one of important factors that influence shippers’ choice behaviour. This research also facilitates managers’ understanding on how shippers may select LSPs taking into account important factors including the environmental consideration.