MINISTRY OF EDUCATION AND TRAINING University of Economics Ho Chi Minh City DANG NGOC HOANG CORE CRITERIA AFFECTING INTENTION TO SELECT A SUPPLIER OF LESS THAN CONTAINER LOAD (LCL) IMPORT SERVICE IN HO CHI MINH CITY MASTER THESIS IN ECONOMICS Ho Chi Minh City – 2018 TIEU LUAN MOI download : skknchat@gmail.com MINISTRY OF EDUCATION AND TRAINING University of Economics Ho Chi Minh City DANG NGOC HOANG CORE CRITERIA AFFECTING INTENTION TO SELECT A SUPPLIER OF LESS THAN CONTAINER LOAD (LCL) IMPORT SERVICE IN HO CHI MINH CITY Major: Business Administration (Research) Code: 8340101 Master Thesis in Economics Supervisor: Dr. Tran Thi Thanh Phuong. Ho Chi Minh – 2018. TIEU LUAN MOI download : skknchat@gmail.com COMMITMENTS I commit that: “Core criteria affecting intention to select a supplier of Less Than Container Load (LCL) import service in Ho Chi Minh city” is my own research, which is based on the study and guidance of Dr.
Tran Thi Thanh Phuong. This thesis includes accurate referencing cited from the vast majority of research carried out by reputable authors in the world with detailed in-text citations. The content and results of the analysis are honest and have not been published in any form before, so the comments, evaluations and conclusions are reliable. Ho Chi Minh City, 2018.
Dang Ngoc Hoang. TIEU LUAN MOI download : skknchat@gmail.com TABLE OF CONTENTS BACK COVER PAGE COMMITMENTS TABLE OF CONTENTS LIST OF ABBEREVIATIONS LIST OF TABLES LIST OF FIGURES ABSTRACT CHAPTER 1 INTRODUCTION .2 Purpose of the study: .3 Novelty value and significance of the Study .4 Subjects and Scopes of study: .5 Limitation of the Study:. Error! Bookmark not defined.6 The thesis structure: .5 CHAPTER 2 LITERATURE REVIEWS .1 Definition and roles of international freight forwarders.1 Definition of international freight forwarder: .2 Roles of international freight forwarder: .2 Definition and roles of consolidator and less than container load (LCL) service: .1 Definition of consolidator and less than container load (LCL) shipment: .2 Roles of consolidator and less than container load (LCL) import shipment: .3 Standard Operating Procedure (SOP) of Consolidator for LCL Import Shipment: .4 The overview of less than container load (LCL) service in Ho Chi Minh City.5 Purchasing, Purchasing process and Behavioral Intention: .6 Factors influencing freight forwarder selection. 18 TIEU LUAN MOI download : skknchat@gmail.7 An overview of related researches that analysis factors affecting to select a supplier of LCL service.8 Proposed Research Model and The Scale of Variables: .1 Proposed research model: .2 The measurement scale for selected factors: .29 CHAPTER 3 RESEARCH METHODOLOGY .2 The qualitative research: .3 The tools and method of survey: .4 Target respondents and the sampling.6 The quantitative analysis: .38 CHAPTER 4 DATA ANALYSIS .1 Demographical Data of the Respondents: .1 Position of respondents: .2 Business type of respondents: .3 Consolidators were chosen by respondents.4 Commodities were imported by LCL import service.5 Frequency of using import service: .6 Markets imported LCL cargo into Vietnam: .7 The Level of Factors on Customer Selection Intention to use LCL Service.3 Exploratory Factor Analysis (EFA): .1 EFA for independent variables: .2 EFA for dependent variable: .5 Multiple Regression Analysis.54 CHAPTER 5 CONCLUSION AND RECOMMENDATIONS.1 Conclusion of the Study .2 Limitation and future research .3 Recommendations to LCL import supplier.61 TIEU LUAN MOI download : skknchat@gmail.1 Recommendations for Responsiveness.2 Recommendations for reliability: .3 Recommendations for Empathy .4 Recommendations for Rates .5 Recommendation for Assurance .6 Recommendations for resource .64 REFERENCE APPENDIX TIEU LUAN MOI download : skknchat@gmail.com LIST OF ABBEREVIATIONS CBM: Cubic Meter.
KMO: Kaiser – Meyer – Olkin KPI: Key Performance Indicator. LCL: Less Than Container Load EFA: Exploratory Factor Analysis. EXW: Ex-Work. FOB: Free On Board.
FCL: Full of Container Load. SOP: Standard Operating Procedure. SPSS: Statistical Package Software For Social Science. TEU: Twenty-foot Equivalent Units TIEU LUAN MOI download : skknchat@gmail.com LIST OF TABLE Table 2.1 Dimension of container according to ISO standard.2 The measurement scales of Banomyong et al (2005) research.3 The overview of factors influencing selection international freight forwarders and consolidators in related researches.1 Measurement scales factors affect selection intention LCL import supplier.1 Position of respondents .2 Business type of respondents .3 Consolidators were chosen by respondents .4 Commodities were imported to Vietnam by LCL import service.5 Frequency of using LCL import service .6 Markets imported LCL cargo to Vietnam .7 Mean and standard deviation of six predictors .9 KMO and Bartlett’s Test of Independent Variables.
49 Table 4-10 Rotated Component Matrixa for Indepentent Variables.11 KMO and Bartlett's Test .12 Rotated Component Matrix for The Dependent Variable.17 The results of testing all hypotheses. 57 TIEU LUAN MOI download : skknchat@gmail.com LIST OF FIGURES Figure 2.1 Proposed research model……………………………………….1 The research process. 33 TIEU LUAN MOI download : skknchat@gmail.com ABSTRACT Importers and manufacturing factory in Vietnam are using more of their no inventory strategy to reduce storage cost and catch up with the changing need of the market. Thus, there is significant change on quantity of import purchase order, from Full Container Load (FCL) into Less Than Container Load (LCL), but more in frequency of shipments.
The consolidator who is supplying the shipping service for LCL import shipments must always respond to their customers’ demand to ship LCL cargo with competitive cost, short transit time and good at handling service quality. This study was conducted to find out the variables which impact the customer’s intention to select the supplier of LCL import service. Understanding the customer’s behavioral intention will be one of the keys to competitive advantage, which improves the organization’s service level. The requirements for LCL import service providers are becoming more severe, customers want their cargo must be shipped on time without delay and fastest service, cargo must be handled safely and always receive a willingness on resolving troubles and updating information also.
The criteria selected to examine the impact on customer selection intention to use the LCL import supplier based on the previous studies written by authors of the same topic in the world. The result of research did showed that all six factors included Responsiveness, Rate, Resource, Assurance, Empathy, Reliability would positively affect customer intention to select the company's service, while the Responsiveness, Reliability, Empathy factors were the best significant impacts. The findings will be the foundation for choosing strategy to develop a better service and getting more on LCL import shipping market share. Keywords: Selection Intention, Less than container import service, Ho Chi Minh City.
TIEU LUAN MOI download : skknchat@gmail.com 1 CHAPTER 1 INTRODUCTION 1.1 Introduction: Less than container load (LCL) import shipment is the small purchase order which cannot be shipped by full of container load (FCL) transportation mode because of the limited budget. The small shipments will be placed with an organization called consolidator who provides the collecting and shipping LCL import service. Consolidators combine a large amount of LCL shipments from different shippers and arrange with the same schedule and destination to utilize container space and reduce cost (Vitasek, 2006). The consolidator buys the FCL ocean freight from carrier and sells the LCL ocean freight to the freight forwarding companies or direct shippers based on the cubic meter (CBM) of volume.
The number of LCL shipments imported to Vietnam is increasing which was mentioned in Vietnam Logistics Reports in 2017. The report showed that the global maritime shipping market was expected to exceed 730 million TEU of full of container method while the volume of consolidated container reached 500 million TEU in 2017 and expected to increase %30 in 2018 (Ministry of Industry and Trade, 2017). This figures demonstrated that more importers and manufacturing factories select “Just In Time” strategy with no inventory to reduce the storage cost, shipping cost and make sure that their import goods and materials can follow up the trend of market. In case of keeping zero inventory, many smaller order will be shipped with higher frequency, it’s a good solution for supply chain management.
Thus, LCL import shipment becomes very common in logistics business and LCL import shipping market between consolidators in Vietnam becomes more and more competitive. TIEU LUAN MOI download : skknchat@gmail.com 2 Nguyen Hanh Tam (2017) reported Shipping gaze magazine that there are more than 3000 forwarders and more than 100 consolidators in Ho Chi Minh city. The LCL shipping market has been become highly competitive when many global consolidators penetrate Vietnam market. The annual sales volume of import ocean freight in Less than Container Load (LCL) to Vietnam is accounted for more than 100 million shipments.
Most of them are exported from Europe, Asia, USA with over %70 of Asia, over %20 of Europe and %10 of USA and others. In order to create the competitive advantage and expand the marketshare, consolidators must improve to create their competitive advantages in providing LCL import service. Most previous researches were related to the factors influencing to LCL service quality or intention to select LCL supplier for export shipments. For instant, namely Dang Huynh Kha (2015) focused on finding the factors which affect to decision to select a supplier of LCL export service, Bien Thi Mai Duyen (2014) concentrate in finding the criteria influencing to the LCL export service quality.
Pisoot (2010) researched on the factors impacting on the selection intention supplier of LCL export service. Banomyong et al (2005) researched on influential factors toward exporter and importer on selecting service from freight forwarder in Thailand. None of these mentioned factors influencing intention to select a LCL import service supplier in Vietnam. Recently, many import shipments were controlled booking ocean freight at Viet Nam in order to earn more trading profit.
Consolidators are more focusing on approaching and offering quotation for these import shipments from destination side instead of origin side. This study will focus on the criteria which impact on a customer's intention to select a LCL import service supplier. The thesis will research on retail importers, freight forwarding companies and also consolidators who co-load out their shipments when they are not able to serve by their own service to find out what the best factor is. The relevant theories will be reviewed in the next chapter.
TIEU LUAN MOI download : skknchat@gmail.2 Purpose of the study: The less than container import service market in Vietnam is more and more competitive because of considerable increasing demand. The importers in Vietnam are using more less than container load service instead of full of container load service to reduce shipping cost and storage cost. Therefore, the consolidators who provide the less than container load import service must understand customer’s purchasing intention behavior to establish the suitable business strategy and perceive the strong important factors which affecting the customer intention to select a import consolidators. The consolidators who focus on the right and core factors will be create the competitive advantages.
The research was conducted to help the consolidators in Vietnam understand the customer's behavioral intention to select a transportation service, Identifying the core criteria and comparing the level of each factor which influence intention to select to a supplier of LCL import service. Through identifying and evaluating core criteria influencing the intention to select a LCL import consolidator, propose alternatives to improve quality of LCL import, create the competitive advantages. Six factors were used in this study: Reliability, Rates, Resources, Assurance, Responsiveness and Empathy. The research model is an interpretation of the component from researches of Parasuraman et al (1988), Pisoot (2010), Yael et al (2009), Matear & Gray (1993), Banomyong et al (2005), Min (1994) and Le Tan Buu et al (2014) which are related to buyer's intention to select a freight supplier.
All these factors are significantly important because they directly affect to company’s service performance to attract customer in current business situation. Therefore, three specific research questions are: What are the factors influencing intention to select a LCL import consolidator? How the factors influencing to selection intention a LCL import consolidator? How to improve LCL import consolidation service quality? TIEU LUAN MOI download : skknchat@gmail.