Transportation Research Part E 39 (2003) 399–415

www.elsevier.com/locate/tre

The impact of carrier service attributes on shipper–carrier

partnering relationships: a shipperÕs perspective
Chin-Shan Lu *

Department of Transportation and Communication Management Science, National Cheng Kung University,
1 University Road, Tainan City 701, Taiwan, ROC
Received 18 December 2001; received in revised form 1 December 2002; accepted 23 February 2003

Abstract

Carrier service attributes are important for developing shipper–carrier partnering relationships. This
study used structural equation modeling to investigate the impact of carriersÕ service factors––timing-
related, pricing, warehousing and sales services––on shippersÕ satisfaction from shipper–carrier partnering
relationships. Results indicate that timing-related services influence shippersÕ satisfaction from such rela-
tionships, and shippersÕ satisfaction positively influences partnering. However, the four service factors do
not directly influence shipper–carrier partnering relationships.
Ó 2003 Elsevier Ltd. All rights reserved.

Keywords: Service attribute; Partnering relationship; Structural equation modeling

1. Introduction

Recent trends in the transportation industry indicate that partnering relationships between
carriers and shippers are likely to increase in the future. In particular, shipper–carrier relation-
ships are shifting toward long-term service arrangements, which require a change in criteria for
selecting and evaluating carriers (Kleinsorge et al., 1991; Gentry, 1996). A body of literature has
explored shippersÕ perceptions of marine liner services to assist managementÕs improvement of
service quality (Pearson, 1980; Brooks, 1984, 1985, 1990; Collison, 1984; Tengku Jamaluddin,
1995). Researchers have examined shippersÕ perceptions of service attributes, such as reliability of

*
Tel.: +886-6-2757575x53243; fax: +886-6-275-3882.
E-mail address: lucs@mail.ncku.edu.tw (C.-S. Lu).

1366-5545/$ - see front matter Ó 2003 Elsevier Ltd. All rights reserved.
doi:10.1016/S1366-5545(03)00015-2
400 C.-S. Lu / Transportation Research Part E 39 (2003) 399–415

sailing, availability of cargo space, on-time pick-up, etc., and their influence on the selection of
carriers. However, few have specifically explored the influence of service attributes on a partnering
relationship. While the antecedents of partnerships have been widely discussed in the buyer–
supplier literature, an understanding of the service attributes crucial to forming a shipper–carrier
partnering relationship is lacking. This study investigates the impact of carriersÕ service attributes
on shipper–carrier partnering relationships.
Section 2 reviews and discusses the literature on partnering relationships, service attributes, and
satisfaction and partnering orientation. Section 3 outlines methodological issues and respondentsÕ
characteristics. Section 4 presents the results of the analyses. Conclusions and discussion are
provided in the final section.

2. Literature review

2.1. Partnering relationships

Many definitions have been offered for the concept of a partnership. Some studies have even
made the analogy between a partnership and a marriage (Tompkins, 1995). Ellram and Hendrick
(1995) defined a partnership as an ongoing relationship between two firms that involves a com-
mitment over an extended time period, and a mutual sharing of information and the risks and
rewards of the relationship. Researchers examining partnering relationships have posited theories
for why firms enter into closer business relationships (Porter, 1980; Anderson and Narus, 1990;
Mohr and Spekman, 1994; Kozak, 1997; Vlosky and Wilson, 1997; Ganesan, 1994). A partnership
has been defined as a purposive relationship between independent firms who share compatible
goals, strive for mutual benefit, and acknowledge a high level of mutual interdependence (Mohr
and Spekman, 1994). Partnership formation is motivated primarily to gain competitive advantage
in the marketplace (Bleeke and Ernst, 1991). Partnerships can provide a firm access to new
technologies or markets and the ability to provide a wider range of services (Powell, 1987). From
a supply chain management perspective, La Londe and Cooper (1989) defined a partnership as ‘‘a
relationship between two entities in the logistics channel that entails a sharing of benefits and
burden over some agreed upon time horizon’’.
There are six specific types of relationships identified: armÕs length, Type I partnership, Type II
partnership, Type III partnership, joint ventures, and alliance (Coyle et al., 1999; Lambert and
Stock, 1993). Some research has proposed that relationship styles are positioned on a continuum,
with one end anchored by the armÕs length relationship and the other anchored by a true part-
nership (Gardner et al., 1994). This makes sense because an armÕs length relationship between a
carrier and a shipper can be implemented with a contract (such as a leasing agreement) or without
one (such as common carriage), whereas a partnership can have a formalized document managing
the relationship.
At times, it may be advantageous for a firm to contract with a specific carrier to service a
particular market segment, even though it has a large private carrier fleet. Some shippers may be
located in remote areas where servicing them with the firmÕs private fleet may be too costly. In
such a case, it would be more beneficial for the firm to have a common or contract carrier service
those customers rather than to do it itself (Lambert and Stock, 1993).
 C.-S. Lu / Transportation Research Part E 39 (2003) 399–415 401

Coyle et al. (1999) explained that the armÕs length relationships is a single transaction between
two parties. No commitment exists on the part of either the shipper or carrier to continue to do
business together. Normally, the single deciding factor in this relationship is price. These rela-
tionships are very short-term in nature.
A Type I partnership can be described as a short-term contractual relationship that requires
little investment on the part of either party and which has a limited scope of activities. The service
offered is not much different than what would be offered to the market in general. This type of
relationship is very common in the transportation industry. Type II partnerships can also be
described as contractual in nature. However, these contracts are longer term in nature, might
require investment from either party, and have a larger scope of activities. Those carriers that
have gained the status of ‘‘core carrier’’ enjoy a more integrated relationship with the shipper than
other carriers. A Type III partnership is not governed by a typical contract mechanism. Assets in
the relationship can be jointly owned and the scope of activities that is shared is substantial.
Carriers in these partnerships are often referred to as ‘‘third parties’’ because of the scope of their
responsibilities for the shipper (Coyle et al., 1999).
Joint ventures represent a different type of relationship between two firms because the result
of the relationship is usually the creation of other firms. This relationship obviously requires
investments from both parties. The focus of a joint venture is for each party to benefit from
the other partyÕs expertise. By definition, these types of relationships are long-term in nature
because of the need to generate a return on initial and continuing investments made by each
firm.
Traditional relationships between shippers and carriers have been ‘‘arm length’’ transactions;
that is, each entity has attempted to maximize its own interests with little regard for how the
relationship might benefit or penalize the other party. Recently, however, firms and carriers have
begun to recognize the benefits that can result from developing alliances with each other for the
purpose of mutually benefiting both parties. Such a relationship is termed symbiosis because both
parties benefit from the relationship (Gentry, 1994; Lambert and Stock, 1993; Bowersox, 1990).
From a marketing perspective, strategic alliances are defined as partnerships between organiza-
tions that create competitive advantages. Companies form many types of strategic alliances today.
Some create horizontal alliances between firms at the same level in the supply chain; others define
vertical links between firms at the adjacent stage (Boone and Kurtz, 2001).
As previously mentioned, the types of relationships that firms can be involved in differs, with
special attention given to contracts and partnerships. However, the current relationships between
shippers and carriers in Taiwan only exhibit a Type II partnering relationship. Carriers usually
provide guaranteed annual spaces, dedicated freight service routes, an incentive of cost-reduction,
more than basic transportation service, and a longer term relationship for shippers. They might
require investment from either party. The examination of this study specifically focuses on this
type of relationship.
Key ingredients for any successful partnering relationships are good and effective means of
services. This is especially important in developing shipper–carrier partnering relationships due to
the intangibility of the services provided. Since services are performances rather than objects, they
cannot be inventoried or verified in advance (Parasuraman et al., 1985). Gentry (1996) notes that
the buyer–supplier partnering relationship requires sustained service performance on the part of
the carrier and early identification of problem areas by both parties.
402 C.-S. Lu / Transportation Research Part E 39 (2003) 399–415

2.2. Service attributes

A number of studies have discussed the selection of service attributes in the shipping industry.
Pearson (1980) examined container carrier performance and service quality from a UK shipper
viewpoint, concluding that service attributes, such as port itinerary, sailing date, expected arrival
date, transit time, port proximity, regularity, reliability, slot availability, etc. are all important
determinants in the carrier selection.
Brooks (1984, 1985, 1990) investigated determinants affecting shipper choice of a container
carrier. She found that cost of service was the most important selection criterion, followed by
frequency of sailings, reputation, transit time and directness of sailings.
Collison (1984) assessed liner companies on Central Alaskan service routes. He discovered the
most important items for meeting shippersÕ requirements were, in order of importance: the extent
to which specific instructions are complied with, overall average time in transit, schedule reli-
ability, and the ability to service outbound and inbound ports.
Suthiwartnarueput (1988) explored the efficiency of the shipping industry in Thailand. She
showed that the most important service attribute was cost of service, followed by punctuality,
transit times, frequency of sailings, directness of sailings, and past loss and damage experience.
Matear and Gray (1993) examined freight transport services in the Irish sea market. Among
freight shippers the most important service items were: fast response to problems, on-time col-
lection and delivery, value for money and good relationships with carriers. In contrast, the most
important service attributes for freight carriers were: punctuality of sea service, availability of
freight space, high frequency of sea service and fast response to problems.
Tengku Jamaluddin (1995) investigated the marketing of liner shipping services with reference to
the far East/Europe trade. The six service factors shippers considered the most important were:
freight rates, cargo care and handling, knowledgeability, punctuality, transit time and service fre-
quency. In contrast, the six service attributes carriers regarded the most important were: know-
ledgeability, freight rates, cargo care and handling, punctuality, transit time and service frequency.
Chiu (1996) evaluated the logistics performance of liner shipping, assessing carriersÕ performance
from the shipperÕs perspective. He found that the six most important service attributes for shippers
were: prompt response from carrier to any problem, transit time, reliability, documentation services,
notice of delay and assistance with loss/damage claims. Relevant studies include those of DÕeste and
Meyrick (1992); Marlow and Goggin (1993); Lu and Marlow (1999) and Lu (2000).
An appraisal of previous studies indicates service attributes are related to distribution and
logistics activities, particularly transit time, frequency of service, reliability of delivery, speed of
claimsÕ response, on-time pick-up and delivery, and other aspects of physical distribution. This
suggests that logistics and physical distribution have become increasingly important in the
partnering relationship. From the investigation of the literature, 30 carrier service attributes were
selected for a questionnaire survey.

2.3. Satisfaction level and partnering orientation

Satisfaction has been defined as ‘‘a positive affective state resulting from the appraisal of all
aspects of a firmÕs working relationship with another firm’’ (Anderson and Narus, 1984). Satis-
faction is the desired outcome of partnering relationships (Anderson and Narus, 1984; Frazier,
 C.-S. Lu / Transportation Research Part E 39 (2003) 399–415 403

1983; Frazier et al., 1988). Research into channel member roles has found that satisfaction is
related to the perceptions of past performance, autonomy, and structure, i.e., a high satisfaction
level is found to lead to a long-term continuation of relationships (Gladstein, 1984).
Shipper–carrier partnering relationships have been defined as the extent to which there is
mutual recognition and understanding that the success of each firm depends in part on the other
firm, with each firm consequently taking actions so as to provide a coordinated effort focused on
jointly satisfying the requirements of the customer marketplace (Anderson and Narus, 1990). A
carrier must meet the demands made upon it if it wishes to develop a relationship with shippers
from the first tentative beginnings of the inquiry stage. Thus, an examination of the satisfaction
level of carrier service attributes from a shipperÕs perspective is firstly required to evaluate ship-
per–carrier partnering relationships.
Partnering orientation is the perceived interdependence of outcomes and is expected to bring
benefits to both ocean carriers and shippers in the long run. Firms with a long-term orientation
focus on achieving future goals and are concerned with both current and future outcomes. Firms
with a short-term orientation rely on the efficiencies of market exchanges to maximize their profits
in a transaction, whereas firms with a long-term orientation rely on relational exchanges to
maximize their profits over a series of transactions. Relational exchanges obtain efficiencies
through joint synergies resulting from investment in and exploitation of idiosyncratic assets and
risk sharing. Both orientations have the ultimate objective of maximizing the outcomes obtained
by channel members (Ganesan, 1994). In Noordewier et al. (1990) study, a long-term partnering
orientation includes the element of future interaction proposed but also focuses on the partiesÕ
desire to maintain a long-term relationship.
It is helpful to understand shipper–carrier partnering relationships considering both shippersÕ
and carriersÕ perceptions. However, due to cost and time constraints, this study focuses on

Table 1
Shipper evaluative dimensions for satisfaction level and partnering orientation
Dimensions
Satisfaction level
wrs: With regard to formal policies, sales support, and overall working relationship, please rate
your companyÕs level of satisfaction with carrier(s).
(mean: 1 ¼ very dissatisfied 5 ¼ very satisfied)
wrh: Please indicate your agreement or disagreement with the following statement: our companyÕs
working relationship with our partner has been a happy one.
(mean: 1 ¼ strongly disagree 5 ¼ strongly agree)
ltp: If your company could do, how likely would it form a long-term partnership with your
existing partner again, rather than another?
(mean: 1 ¼ extremely unlikely 5 ¼ extremely likely)
Partnering orientation
clt: We expect our relationship with our partner to continue for a long time.
(mean: 1 ¼ strongly disagree 5 ¼ strongly agree)
com: We are committed to our partner.
(mean: 1 ¼ strongly disagree 5 ¼ strongly agree)
par: The business relationship with our partner can be described as a ‘‘strategic partnership.’’
(mean: 1 ¼ strongly disagree 5 ¼ strongly agree)
404 C.-S. Lu / Transportation Research Part E 39 (2003) 399–415

satisfaction level with partnering relationships from the perspective of the shipper. The research
firstly provides a model for understanding the impact of carrier service attributes on satisfaction
level and partnering orientation from a customerÕs (shipperÕs) perspective. Dimensions of shipper
satisfaction level and partnering orientation used in the study are shown in Table 1.

3. Methodology

3.1. Questionnaire design

After a review of previous literature and personal interviews with shipping practitioners, the
step-by-step stages of the questionnaire design were based on ChurchillÕs (1991) study which
suggests an iteration and looping design. The stages are (1) specify what information will be
sought, (2) determine the type of questionnaire and method of administration, (3) determine the
content of individual questions, (4) determine the form of response to each question, (5) determine
the wording of each question, (6) determine the sequence of questions, (7) determine the physical
characteristics of the questionnaire, (8) re-examine previous steps and revise if necessary, and (9)
pretest the questionnaire and revise if necessary.

3.2. Sampling technique

Due to time and cost constraints, the study consisted of the top 300 firms in the 1998 ‘‘List of
Leading Firms’’ published by the Board of Foreign Trade of the Ministry of Economic Affairs,
Taiwan. The potentially effective population size was reduced to 289 shippers because 11 man-
agers had left companies, or businesses were no longer in existence. The total number of usable
responses was 87; an overall response rate of 30.1%.

3.3. Research methods

Research methods included factor analysis, correlation analysis, reliability and validity testing,
and structural equation modeling (SEM). SEM includes one or more linear regression equations
that describe how the endogenous constructs depend upon the exogenous constructs. Their co-
efficients are called path coefficients, or sometimes regression weights. SEM must be directed by
theory, which is critical for model development and modification (Reisinger and Turner, 1999).
According to Hair et al. (1995), there are seven steps involved in the SEM process and testing: (1)
developing a theoretically based model; (2) constructing a path diagram of causal relationships;
(3) converting the path diagram into a set of structural equations and measurement equations; (4)
choosing the input matrix type and estimating the proposed models; (5) assessing the identifica-
tion of the model equations; (6) evaluating the results for goodness-of-fit; and (7) interpreting and
modifying the model.
In order to interpret the results more precisely a variance/covariance matrix and a correlation
matrix were used. SEM was initially formulated for use with a variance/covariance matrix (hence
its common designation as covariance structure analysis). A covariance matrix has the advantage
of providing valid comparisons between different populations or samples, something not possible
 C.-S. Lu / Transportation Research Part E 39 (2003) 399–415 405

when models are estimated with a correlation matrix. Interpretation of the results, however, is
somewhat more difficult when using covariances because the coefficients must be interpreted in
terms of the units of measure for the constructs. Correlation matrices have a common range that
makes possible direct comparisons of the coefficients within a model (Hair et al., 1995, p. 636;
Bollen, 1989). Analyses of both correlations and covariances are used in this study.
The analyses were carried out using the SPSS 8.01 (1998) for Windows and AMOS 3.61 (1998)
statistical packages. The AMOS programme calculates the likelihood ratio v2 , its associated de-
grees of freedom, and probability. The smaller the likelihood ratio v2 values the better the modelÕs
fit, and an insignificant v2 is preferable because it shows the modelÕs predicted R is sufficiently
close to the observed data S for the remaining differences to be only sampling fluctuations.
Respondents in the questionnaire survey were mainly clerks (29.8%), managers/assistant
managers (22.6%) or directors/vice directors (21.4%), vice presidents or above (10.7%), in other

Table 2
ShippersÕ satisfaction with carrier service attributes
Variables Mean SD Rank
Sa01 Availability of cargo space 3.95 0.61 1
Sa02 Low damage or loss record 3.83 0.58 2
Sa03 Accurate documentation 3.83 0.57 3
sa04 Reliability of advertised sailing schedules 3.79 0.70 4
sa05 Courtesy of inquiry 3.78 0.74 5
sa06 On-time pick-up 3.72 0.66 6
sa07 High frequency of sailing 3.70 0.68 7
sa08 Door-to-door service 3.70 0.71 8
sa09 Service coverage 3.69 0.70 9
sa10 Knowledgeability of sales personnel 3.69 0.60 10
sa11 Short transit time 3.68 0.70 11
sa12 Ability of sales representatives to handle problems 3.67 0.63 12
sa13 Consolidation service 3.65 0.60 13
sa14 Tariffs simplified 3.64 0.64 14
sa15 Customs clearance service 3.64 0.54 15
Sa16 Prompt response to shippersÕ complaints 3.61 0.59 16
Sa17 Inland transportation 3.59 0.56 17
Sa18 Storage service 3.58 0.76 18
sa19 Ability to provide non-standard equipment 3.53 0.93 19
sa20 Computer EDI interface 3.49 0.69 20
sa21 Freight rates 3.49 0.66 21
sa22 Cargo tracing 3.47 0.66 22
sa23 Willingness to negotiate 3.46 0.73 23
sa24 Frequency of sales representativesÕ calls to shippers 3.45 0.70 24
sa25 Packaging/labeling service 3.42 0.78 25
sa26 Good condition of containers 3.40 0.79 26
sa27 Pricing flexibility in meeting competitorsÕ rates 3.39 0.61 27
Sa28 Price and discount structure 3.37 0.58 28
Sa29 Prompt response to claim 3.33 0.69 29
Sa30 Providing sailing schedules in newspapers or magazines 3.22 0.47 30
Note: mean: 1 ¼ very poor 5 ¼ very good; SD ¼ standard deviation.
406 C.-S. Lu / Transportation Research Part E 39 (2003) 399–415

positions (9.5%) or sales representatives (6%). The type of firm included manufacturers (63%),
trading companies (33%) and other types of firm (4%).
Table 2 presents shippersÕ satisfaction with carrier service attributes based upon questionnaire
responses. In order to ascertain shippersÕ relative satisfaction with carriers service attributes, each
of the variables was assessed using a five point Likert scale, where ‘‘1 ¼ very poor’’ and ‘‘5 ¼ very
good’’. Although freight rates, willingness to negotiate, pricing flexibility in meeting competitorsÕ
rates, price and discount structure and providing sailing schedules in newspapers or magazines are
not service attributes, they have been found to be important dimensions in the shipper–carrier
relationship in previous research. For example, Brooks (1983) and DÕeste and Meyrick (1992)
found shippers ranked the price factor as an important factor in their evaluation of carriersÕ
services. Suthiwartnarueput (1988) indicated cost of service was ranked as an important service
attribute in a study of carriersÕ performance. Gibson et al. (1993) referred to the issue of quality,
customer service and total costs as major concerns for shippers in the early years of deregulation,
although the primary value sought by many transportation buyers has more recently shifted from
price to service performance. Because previous research had shown that pricing and advertising
variables could influence shippersÕ satisfaction with partnering relationships, these variables were
used in the present study.
An evaluation of aggregated shippersÕ perceptions of carriersÕ service attributes showed all 30
service attributes to be satisfactory. However, the five most satisfactory service attributes, ac-
cording to shippers, were: availability of cargo space, low damage or loss record, accurate doc-
umentation, reliability of advertised sailing schedules, and courtesy of inquiry. In contrast, the five
least satisfactory service attributes were: good condition of containers, pricing flexibility in
meeting competitorsÕ rates, price and discount structure, prompt response to claim, and providing
sailing schedules in newspapers or magazines.

4. Results of empirical analyses

4.1. Factor analysis results

Factor analysis is a technique used to reduce a large set of variables to a smaller set of
underlying factors, detecting the presence of meaningful patterns among the original variables
and extracting the crucial dimension. Principal components analysis with VARIMAX rota-
tion was employed to identify key dimensions. The factor analysis results are shown in full in
Appendix A.
As can be seen from Appendix A, service factors were found to underlie the various measures of
service in a partnering relationship. Factor loadings greater than 0.50 were statistically significant
(Hair et al., 1995, p. 385). Thus, four service items, i.e. low damage or loss record, prompt re-
sponse to shippersÕ complaints, ability to provide non-standard equipment, and tariffs simplified,
were eliminated. Seven factors or key dimensions were identified:

(1) Factor 1, a timing related factor, comprised eight items, namely, availability of cargo space,
accurate documentation, prompt response to claim, short transit time, high frequency of sail-
ing, on-time pick-up, reliability of advertised sailing, and service coverage. This factor
 C.-S. Lu / Transportation Research Part E 39 (2003) 399–415 407

accounted for 37.04% of the total variance. On-time pick-up service was the highest loaded
service item in this factor.
(2) Factor 2, a pricing related factor, consisted of four items, namely, freight rates, price and dis-
count structure, pricing flexibility in meeting competitorsÕ rates, and willingness to negotiate.
Pricing flexibility in meeting competitorsÕ rates was the highest loaded service item. This factor
accounted for 7.24% of the total variance.
(3) Factor 3, a warehousing services factor, comprised five items, i.e. customs clearance service,
storage service, packaging/labeling service, consolidation service, and inland transportation.
Storage service was the highest loaded service item. This factor explained 6.63% of the total
variance.
(4) Factor 4, a sales services factor, consisted of three items, i.e. frequency of sales representativesÕ
calls to shippers, knowledgeability of sales personnel, and ability of sales representatives to
handle problems. Knowledgeability of sales personnel was the highest loaded service item
in this factor. This factor accounted for 5.22% of the total variance.
(5) Factor 5, a door-to-door factor, comprised two items, namely, door-to-door service and good
condition of containers. Door-to-door service was the highest loaded service item in this fac-
tor, therefore, it was identified as a door-to-door services factor. It accounted for 4.93% of the
total variance.
(6) Factor 6, an information factor, consisted of two items, namely, computer EDI interface and
cargo tracing. Factor 6 accounted for 4.37% of the total variance.
(7) Factor 7, an advertising factor, comprised two items, namely, courtesy of inquiry and provid-
ing sailing schedules in newspaper or magazine. Initially, it was difficult to name this factor
but because the latter was the highest loaded service item in this factor it was called an adver-
tising services factor. It explained 4.01% of the total variance.

4.2. Reliability and validity

The questionnaireÕs content validity was established through a theoretical review and pilot
study. Questions in the study instrument were based on previous studies and discussed with a
number of executives and experts in the field.
Cronbach a values for each dimension were statistically determined to provide a summary
measure of the inter correlations that existed among a set of items. Cronbach a values for each
dimension are presented in Table 3. With the exception of Factor 7, Cronbach a values were well
above the 0.60 value considered adequate for achieving a satisfactory level of reliability in re-
search (Nunnally, 1978; Churchill, 1991; Sekaran, 1992). To reduce bias, Factor 7 was eliminated
from subsequent analysis in this study.

4.3. Correlation analysis results

Correlations between the six service factors and shippersÕ satisfaction level and partnering
orientation were analyzed. Bivariate relationships between the separate dimensions are presented
as Pearson correlation coefficients (see Table 4). The results indicate that the timing related ser-
vices factor, pricing related services factor, warehousing services factor, and sales services factor
were positively correlated with shippersÕ satisfaction level, and the timing related services factor
408 C.-S. Lu / Transportation Research Part E 39 (2003) 399–415

Table 3
Cronbach a values for each dimension
Service factors Cronbach a
1. Timing related services 0.9013
2. Pricing related services 0.8860
3. Warehousing services 0.8384
4. Sales services 0.7059
5. Door-to-door services 0.6529
6. Information services 0.6929
7. Advertising services 0.0920

Table 4
Correlation between service factors, satisfaction level and partnering orientation
Dimensions TRF PSF WSF SSF DSF ISF SR
Timing related services factor (TRF)
Pricing services factor (PSF) 0.482
Warehousing services factor (WSF) 0.598 0.388
Sales services factor (SSF) 0.425 0.381 0.500
Door-to-door services factor (DSF) 0.550 0.323 0.536 0.467
Information services factor (ISF) 0.424 0.429 0.366 0.353 0.431
Satisfaction with carrier relationships (SR) 0.383 0.265 0.323 0.222 0.166 0.147
Partnering orientation (PO) 0.250 0.209 0.188 0.153 0.120 )0.036 0.445

Represents p < 0:05.

Represents p < 0:01.

and shippersÕ satisfaction level had a positive correlation with partnering orientation at the 0.05
level of statistical significance. However, the door-to-door and information services factors were
not significantly correlated with shippersÕ satisfaction level and partnering orientation. Thus, the
latter two dimensions were eliminated from the subsequent SEM.

4.4. Structural equation modeling

Using the above results, an estimated model of service factor, shippersÕ satisfaction with carrier,
and partnering orientation was conducted. There were four evaluative dimensions (timing related
services factor, pricing related services factor, warehousing services factor and sales services
factor), acting as exogenous variables, and related to the endogenous variables, shippersÕ satis-
faction level and partnering orientation. According to Hair et al. (1995) and Bollen (1989),
identification of the estimated model is necessary and it was therefore identified as follows:
1 1
s ¼ ðp þ qÞðp þ q þ 1Þ ¼ ð20 þ 6Þð20 þ 6 þ 1Þ ¼ 351; t ¼ 41;
2 2
where p is the number of endogenous variables, q the number of exogenous variables, p þ q the
number of manifest variables and t the number of estimated coefficients in the model. The esti-
 C.-S. Lu / Transportation Research Part E 39 (2003) 399–415 409

mated model was overidentified (t < s), therefore, one set of estimates could be used to test the
model.
However, an assessment of the adequacy of the model found it to be discredited. The v2 value
was statistically significant at the one percent level, indicating that differences between the
model-implied covariance matrix R and data-observed S were significantly large. The goodness-
of-fit index (GFI) value was 0.764. After adjustment for the degrees of freedom relative to the
number of variables, the adjusted goodness-of-fit index (AGFI) was 0.708, implying that only
70.8% of the variances and covariances in the data observed were predicted by the estimated
model.
Estimates of covariance for the estimated model were conducted; only satisfaction level (esti-
mate ¼ 0.715, CR > 1.96) was found to be significantly related to partnering orientation. Timing
related services factor, pricing services factor, warehousing services factor and sales services factor
were not found to be significantly related to satisfaction level and partnering orientation. Hence,
the estimated model and set of coefficient estimates were not consistent with the observed co-
variance, and the model did not survive potential discreditation.
A normalized residual analysis of the estimated model was also conducted. The following
variables: availability of cargo space (sa1), accurate documentation (sa3), prompt response to
claim (sa5), service coverage (sa10), packaging/labeling service (sa15), freight rates (sa23) and
frequency of sales representativesÕ calls to shippers (sa27) had residuals exceeding 1.00, suggesting
that the elimination of these indicators might create a substantial improvement in fit.
Identification of the newly proposed model was undertaken by confirmatory factor analysis of
the four latent variables (timing related services factor, pricing services factor, sales services factor
and warehousing services factor) according to the conditions laid down by Bollen (1989). The v2
value was not significant (v2 ð59Þ ¼ 65:97, P ¼ 0:249), therefore, the proposed model was credited.
The GFI was 0.896. After adjustment for the degrees of freedom relative to the number of
variables, the AGFI was 0.840. This suggested that the four latent variables model were identified,
reliable and valid.
Therefore, a modified model was devised based on the previous model (see Fig. 1). The overall
modified model fit was found adequate. The v2 value was not significant (v2 ð140Þ ¼ 146:87,
P > 0:05), therefore, the model was credited. The GFI was 0.854. After adjustment for the degrees
of freedom relative to the number of variables, the AGFI was 0.802, implying that 80.2% of the
variances and covariances in the data observed were predicted by the model. The modified model
was thus found adequate.
Table 5 shows the results of estimates of covariance for the modified model. The satisfaction
level (estimate ¼ 0.714, CR > 1.96) was found to be significantly related to shippersÕ satisfaction
with carrier relationship, whereas the timing related services factor (estimate ¼ 0.301, CR > 1.96)
was found to be significantly related to satisfaction level. However, the sales services factor (es-
timate ¼ 0.135, CR < 1.96), pricing services factor (estimate ¼ 0.091, CR < 1.96) and warehousing
services factor (estimate ¼ 0.115, CR1.96) were not found to be significantly related to satisfaction
level. Results suggest that the timing related services factor is positively related to shippersÕ sat-
isfaction, and shippersÕ satisfaction positively influences partnering orientation. In addition, the
covariance results of indicated a positive correlation between the timing services factor, pricing
services factor and warehousing services factor in both the proposed and modified models. This
result was consistent with the results of correlation analysis.
410 C.-S. Lu / Transportation Research Part E 39 (2003) 399–415

.48 .84 .26

Chi-square = 146.87
e19 e18 e17
Degrees of freedom = 140
1 1 1 Probability level = 0.329
ltp wrh wrs
GFI = 0.854
.18 sa11 AGFI = 0.802
1 1.00 .80 1.34
e4 sa06 .17
.17 sa07 .80
.38 satisfaction
1
b1
1 .30
e5 sa07 .87
.12
1
sa06 1.00 timing
.09

e6 sa08 b2
.85 .71
1sa04
.21 .11
.09 -.08 .41
e7 sa09 1
1
clt e20
.16 1.00
.14 .12 .14 1.53
.09
1.78 1
Orientation com e21
.30
2.04 .57
1
par e22
.18
1
sa28 1.00 pricing .10
e10 sa24 .08
1.20 .14
.16
1 sa27
.14
sa10 .19
1.18 1.00 1
e11 sa25
warehousing sales sa28 e26

1 sa23
.19
1.68 .07
1.13 1.20 1.46 1.00
e12 sa26 1
sa29 e27
sa13
sa17 sa16 sa14 sa13 sa24
1
sa17
1 1 1
.13 .14 sa18 .11 .22 sa15
e24 e16 e14 e13
e17,e18,e19,e20,e21,e22

Fig. 1. Results of the modified model. Note: (a) e4, e5, e6, e7, e10, e11, e12, e13, e14, e16, e24, e26, e27 are errors for
indicators of exogenous variables, whereas e21, e22, e23, e24, e25, e26 are errors for indicators of endogenous variables.
(b) GFI represents the goodness-of-fit index, AGFI represents the adjusted goodness-of-fit index.

Table 5
The estimates and covariances for the modified model
Variables Estimate SE CR
Regression
Timing ! satisfaction 0:301 0.149 2:016
Sales ! satisfaction 0.135 0.205 0.661
Pricing ! satisfaction 0.091 0.132 0.687
Warehousing ! satisfaction 0.115 0.245 0.470
Satisfaction ! orientation 0:714 0.241 2:962
Timing ! orientation )0.077 0.121 )0.633
Covariances
Timing – pricing 0.162 0.048 3:373
Pricing – warehousing 0.095 0.032 3:007
Timing – warehousing 0.145 0.039 3:709
Warehousing – sales 0.079 0.028 2:886
Pricing – sales 0.090 0.034 2:664
Timing – sales 0.106 0.038 2:794
SE is an estimate of the standard error of the covariance; CR is the critical ratio obtained by dividing the covariance
estimate by its standard error; Underlined values are critical ratios exceeding 1.96, at the 0.05 level of significance.
 C.-S. Lu / Transportation Research Part E 39 (2003) 399–415 411

5. Discussion and conclusions

This study has examined the impact of carrier service attributes on shipper–carrier partnering
relationships from a shipperÕs perspective. The results from this study provide substantial support
for the framework presented in Fig. 1. The five most important carrier service attributes according
to shippers were availability of cargo space, low damage or loss record, accurate documentation,
reliability of advertised sailing schedules, and courtesy of inquiry. This is consistent with previous
maritime studies on carrier service attributes (Collison, 1984; Matear and Gray, 1993; Tengku
Jamaluddin, 1995; Chiu, 1996; Lu, 2000). The present research indicates that carriers need to be
especially concerned with shippersÕ perceptions of these service attributes when developing a
shipper–carrier partnering relationship.
In previous studies of service attributes in carrier selection (Pearson, 1980; Brooks, 1984, 1985,
1990; Collison, 1984; Matear and Gray, 1993; Suthiwartnarueput, 1988; Tengku Jamaluddin,
1995), researchers have mainly concentrated on evaluating satisfaction with services for meeting
shippersÕ requirements. Few researchers have investigated the effect of carrier service attributes on
shippersÕ satisfaction and shipper–carrier partnering orientation. Factor analysis was conducted
in this study to classify service attributes into six critical service factors. These six service factors
were timing related services factor, pricing services factor, warehousing services factor, sales
services factor, door-to-door services factor and information services factor. Correlation analysis
eliminated door-to-door services and information services factors from subsequent analysis.
Using the SEM approach, this study modeled and tested the potential effects of the four remaining
critical carrier services factors (timing related, pricing, warehousing and sales) on shippersÕ sat-
isfaction levels with shipper–carrier partnering relationships.
Though the results suggest service attributes are important for shippersÕ satisfaction in a
partnering relationship, only one dimension, the timing related service factor, is a significant
predictor. Not surprisingly, shippersÕ satisfaction is a key driver of partnering orientation. The
higher the shipperÕs level of satisfaction, the more likely the shipper will continue to maintain a
shipper–carrier partnering relationship. However, this research alone is not sufficient to justify
carriersÕ servicesÕ attributesÕ direct influence on shippersÕ partnering orientations for the following
reasons. First, this study focuses only on the impact of service attributes and shippersÕ satisfaction
on shipper–carrier partnering relationships. According to earlier studies (Anderson and Narus,
1990; Ganesan, 1994; Smith and Barclay, 1997), other factors may affect shippersÕ partnering
relationships, including relative dependence, communication, commitment, trust, environmental
volatility and reputation. Further research is required to understand the impact of these and other
factors on shippersÕ partnering relationships. Second, from a shipperÕs perception, container
transport service attributes may appear homogenous (Brooks, 1990). Thus, while shippers have
difficultly distinguishing service differences between carriers, the influences of carrier service at-
tributes on shippersÕ partnering relationship will not appear significant. Third, as described in
Section 2.1, current shippers and carriers in Taiwan exhibit a Type II partnering relationship. The
cost-reduction incentive would appear to be more important to shippers than the basic trans-
portation service. Moreover, the present container transport market is experiencing overcapacity.
Shippers therefore have more choices to select carriers. In addition, a long-term partnering re-
lationship is not formulated solely on the basis of the impact of carrier service attributes. Risk
consideration is another important factor affecting shippersÕ partnering relationships (Boone and
412 C.-S. Lu / Transportation Research Part E 39 (2003) 399–415

Kurtz, 2001). Shippers are not willing to concentrate their businesses with a few carriers and
develop partnering relationships if there is a commercial risk in doing so.
This research provides a useful approach for shippers to evaluate their relationship with car-
riers. Research findings indicate that the timing related services factor is the most important
services criterion for shippers and, therefore, carriers should focus particularly on this factor in
order to develop a closer partnering relationship with shippers. The level of shipperÕs satisfaction
is found to be a significant antecedent of influence in the partnering relationship. Another im-
plication for practice, this study suggests that each party (the shipper and the carrier) needs to
gain and periodically update its understanding of its partner firmÕs requirements or expectations
and the alternative outcomes competitors are offering. This understanding can then be translated
into responsive programmes and systems that will enable the partnering relationship to be mu-
tually satisfying over time. In addition, the results indicate a significant correlation between timing
related, pricing and warehousing services, implying that the achievement of an effective partnering
relationship requires a combination of these service factors.
The study contributes to the shipper demand literature by investigating shipper satisfaction
with the shipper–carrier partnering relationship. Though numerous studies have investigated the
determinants of channel member satisfaction level (Gaski, 1984), few studies have examined the
impact of satisfaction level on their partnering relationships. To the authorÕs knowledge this is
the first paper to evaluate the impact of carrier service attributes on shippersÕ partnering orien-
tation. This researchÕs use of a structural equation model to create a model for measuring the
independent and dependent variables of shipper–carrier partnering relationships is also a meth-
odological contribution.
Due to time and cost constraints, the study provided a model for understanding what carrier
service factors influence satisfaction level and partnering relationships from a shipperÕs perspec-
tive. However, the development of a partnering relationship requires interaction between two
parties, therefore, future research could usefully identify requirements in a partnering relationship
from a carrierÕs viewpoint since carrier and shipper demands in this context may differ. In ad-
dition, further research could usefully examine other types of relationships, in contrast to part-
nering relationships, for example, arms length or market exchange relationships, joint ventures,
vertical or horizontal strategic alliance, leasing arrangement or long-term contracts. This might
include examining the relative importance of dimensions such as trust, commitment, communi-
cation and relative dependence, and how these are interrelated over time.

Acknowledgement

The research was sponsored by the National Science Council (Taiwan, ROC NSC 88-2416-H-
006-037).

Appendix A

Factor analysis results

 C.-S. Lu / Transportation Research Part E 39 (2003) 399–415 413

Service attributes Factor Factor Factor Factor Factor Factor Factor

1 2 3 4 5 6 7
Availability of cargo space 0:639 0.270 0.212 )0.08 0.379 0.013 0.081
Courtesy of inquiry 0.253 0.294 0.408 0.237 0.084 0.004 0:558
Accurate documentation 0:542 0.126 0.331 0.063 0.115 )0.013 0.139
Prompt response to shippersÕ 0.462 0.203 0.273 0.213 0.097 0.228 0:477
complaints
Prompt response to claim 0:567 0.167 0.104 0.495 0.175 0.092 0.119
Short transit time 0:756 0.148 0.033 0.179 0.302 0.017 0.100
High frequency of sailing 0:770 0.146 0.142 0.028 0.195 0.176 )0.152
On-time pick-up 0:836 0.164 0.197 0.165 )0.085 0.096 0.116
Reliability of advertised sailing 0:776 0.102 0.154 0.062 )0.032 0.206 )0.156
schedules
Service coverage 0:535 0.276 0.325 0.300 0.124 0.032 0.271
Low damage or loss record 0:500 0.283 )0.064 0.338 0.351 0.067 0.230
Door-to-door service 0.216 )0.016 0.383 0.107 0:759 0.129 0.115
Customs clearance service 0.074 0.153 0:712 0.128 0.347 0.112 0.104
Storage service 0.318 0.153 0:743 0.173 0.190 0.055 0.021
Packaging/labeling service 0.155 0.071 0:735 0.135 )0.080 0.041 )0.123
Consolidation service 0.469 0.022 0:590 0.279 0.033 0.060 )0.042
Inland transportation 0.156 0.119 0:502 0.420 0.393 0.183 0.049
Computer EDI interface 0.140 0.007 0.042 0.142 0.249 0:798 0.068
Cargo tracing 0.229 0.386 0.174 0.110 )0.055 0:769 0.037
Good condition of containers 0.277 0.171 )0.009 0.362 0:580 0.322 )0.244
Ability to provide non- 0:452 0.222 0.240 0.028 0.046 0.270 )0.311
standard equipment
Tariffs simplified 0.289 0:500 0.167 0.126 0.465 )0.051 0.138
Freight rates 0.219 0:791 0.005 0.067 0.260 0.047 )0.136
Price and discount structure 0.261 0:793 0.021 0.211 0.175 0.065 )0.043
Pricing flexibility in meeting 0.098 0:838 0.199 0.021 )0.098 0.290 )0.043
competitorsÕ rates
Willingness to negotiate 0.184 0:789 0.212 0.188 )0.070 0.046 0.180
Frequency of sales )0.019 0.239 0.218 0:537 0.209 0.119 )0.284
representativesÕcalls
to shippers
Knowledgeability of sales 0.109 0.030 0.152 0:877 0.043 )0.008 )0.020
personnel
Ability of sales representative 0.214 0.191 0.158 0:657 0.061 0.229 0.107
to handle problems
Providing sailing schedules in 0.126 0.242 0.307 0.353 )0.047 )0.096 0:646
newspapers or magazines
Eigenvalues 11.11 2.17 1.99 1.56 1.48 1.31 1.20
Percentage variance 37.04 7.24 6.63 5.22 4.93 4.37 4.01
414 C.-S. Lu / Transportation Research Part E 39 (2003) 399–415

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