Student Concluding Seminar two Page 1

BANGABANDHU SHEIKH MUJIBUR RAHMAN

MARITIME UNIVERSITY, BANGLADESH

STUDENT CONCLUDING SEMINAR -2

SEMINAR TOPIC: MEASUREMENT OF LOGISTICS SERVICE

QUALITY IN FREIGHT FORWARDING COMPANIES: A CASE STUDY
OF BANGLADESH MARKET

PRESENTED TO

HONORABLE PRESIDENT AND HONARABLE ALL BOARD MEMBERS

OF STUDENT CONCLUDING SEMINAR – 2

PRESENTED BY

MD. ZABER HOSSEN

ROLL: 19212011, SEMESTER: 2ND, MPSM – 05,
FACULTY OF SHIPPING ADMINISTRATION
 Student Concluding Seminar two Page 2

MEASUREMENT OF LOGISTICS SERVICE QUALITY IN FREIGHT FORWARDING

COMPANIES: A CASE STUDY OF BANGLADESH MARKET

Abstract

The purpose of this paper is to improve service quality of international freight forwarders and explore
practical business solutions to enhance customer service level. Freight forwarder usually acts as an agent
to source logistics service for shipper and work closely with carriers such as shipping line airline
companies. This business is characterized by lower capital investment and entry barrier comparing with
carriers, and most of their major customers are small or medium size manufactures or traders. Providing
high quality service to enhance customer satisfaction is the key mission since competition is extremely
severe. This paper empirically investigates the leading freight forwarders to find important customer
requirements in South Asian region especially in Bangladesh. Furthermore, the feature of the study by
using quality function deployment approach would not only identify key technical measures but also
explore meaningful business solutions as direction of quality improvement. The finding reveals key
customer requirements are cheaper agency fees; door to door ability and instant response, and the key
technical measures are customer relationship management, overall information system, service point and
network. We would further discuss the empirical result and conclude managerial meaning for decision
makers. Keywords: Quality function deployment, International freight forwarder, Shipping agent, Fuzzy analytic
hierarchy process (FAHP)

Introduction

Global trade is the vigorous force triggering the growth of both regional and world economy.
International trade brings a lot of advantages to nations and enterprises to share the fruit of business
activities as well as provides people various options to buy their daily necessities. These activities rely on
international transportation to connect cargo, people and country to facilitate business growth and
regional prosperity. Advance transportation not only provides time utility but also place utility form the
point of merchandise production to the point of consumption for the business supply chain management.
Governments also make effort to minimize logistics cost through improve infrastructure to overcome the
trade barriers and vitalize their manufactures and products to stay competitive into the global market.
According to the recent publication of WTO and UNCTAD, over 75% of the global trade is completed by
containerized cargo shipping and the rest of the cargo is mainly dependent on land or air transportation.
(WTO, 2013; UNCTAD, 2013) International freight forwarder plays the primary role to consolidate
containerized cargo from small-medium size and complete business transactions more economically and
efficiently. Freight forwarders play a significant role to complete these economic activities and support
small and medium size enterprises with various logistics solution. (Lloyd’s List, 2014)

Since Financial crisis in 2008, the shipping industry faces serious challenges such as global economic
depression and greater market uncertainly. International freight forwarders in South Asian countries also
could not immune from these negative effects. To well operate the forwarder business becomes extremely
difficult tasks. On the other hand, shippers want better, cheaper, safer, reliable, speedy and professional
service since freight forwarder is also important part of their global supply chain management. Customer
is getting more demanding and competition from other logistics service provider is getting fierce, so it is
necessary for forwarders to redefine standards and strategies to face the changing market and challenges.
According to Llyod’s List 2014, top six freight forwarders in Europe such as DHL Global forwarding and
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Damco suffer a decline in profit due to fierce competition, currency effects and overcapacity of shipping.
Mr. Hanne Sorenson, CEO of Damco stressed that rather than reducing cost or increasing IT investment.
Improving overall service quality and productivity may be more useful to enhance profitability. (Lloyd’s
List, 2014) Therefore, improving the quality of service could not only help the forwarders to survive but
also make profits in such brutal shipping market.

The forwarder plays the role as the bridge between carrier and shipper to source various transport solution
and earns profits by arranging package of delivery service. As an agent, forwarders tend to have more
flexibility to market change since the physical infrastructure investments are far less than the shipping or
airline companies. In order to effectively consolidate LCL (Less than container loaded) cargo to
containers especially for small-medium size manufactures or traders, it is necessary for them to use the
service providing by international freight forwarders as intermediary connection to efficiently complete
the delivery. In general, the duties of forwarders may include space booking on a ship or aircraft, no-
vessel operating carriers (NVOCCs), organizing local and international shipping, providing necessary
paperwork and custom clearance, delivery and distribution service, information service, warehousing,
consolidation and other related formalities. On the other hand, forwarder’s target market is slightly
different from carriers since they tend to target on LCL customer for consolidation while liner carrier
focus more on attracting FCL (Full container loaded) cargo. In South Asia, market is extremely
competitive because service providing by freight forwarder seems to be same or similar to one another,
along with the increasing number of new entrants. Thus, competitive advantage of freight forwarder only
based on cheaper price is not enough. Enhancing satisfactory customer service becomes strategies and
survival issue for forwarders to stay competitive and build sustainability.

Forwarder is a service-oriented industry, and its quality of service is important factor for business success.
Service quality is a key issue of managerial goal of business to pursue customer satisfaction. In literature,
many scholars already discuss the service quality issues of liner shipping and third party logistics service
provider, however, few researches apply quality function deployment (QFD) to explore the service
quality requirement of international freight forwarders. The main contribution of this paper is conducting
expert consultation form India and Bangladesh to define the important solutions for this industry. QFD is
a special procedure to transform service quality requirement into technical requirement through analyzing
the relationship between technical measure and customer requirements. Applying QFD would not only
identify important service quality requirement but also understand useful technical measure for quality
improvement. The basic framework of research process and flowchart are shown in Fig. 1. Figure 1
demonstrates the combining QFD and MCDM (Multi Criteria Decision Making Method) technique to
define suitable for enhancing service quality.

Literature Review: Service attributes of international freight forwarder

Measuring service quality of freight forwarder industry is not an easy task to its heterogeneity,
intangibility and inseparability. Perceived service quality is the description of interaction between
customer and service provider, so we could obtain service quality requirements directly from shipper with
quantitative and qualitative surveys. On the other hand, through reviewing literature and practical
publications, we could find some researches regarding to the service quality requirements of related
shipping, logistics or freight forwarding industry. Brooks (1985) reveals the service quality attributes of
liner shipping industry such as transit time, directness of sailings, carrier’s reputation for reliability,
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Service quality evaluation in international freight

Explain the research purpose
forwarding industry

Reviewing related customer

requirements

Consultation process with expert

survey in South Asia
Reviewing related technical
measure

MCDM process
Rank the priorities of the (CCI,0.03 is
customer requirements acceptable or
not?)

Build house of quality for

relationship matrix assessment

Collecting the surveys from

group consultation

Complete house of quality to

determine key technical measures
Analyze the surveys and rank
the priorities of technical
measure

Discussion of the related

business applications for
international freight forwarder
and decision makers

Fig. 1 Method application design for service quality evolution in international freight forwarding industry
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frequency of sailing and next ship leaving. Lu and Dinwoodie (2002) empirically explore the international
network development of regional forwarders. Collaboration between competing forwarders may create
favorable condition and network sharing for each other. Lai and Cheng (2004) empirically study the
freight forwarding industry in terms of demographic profiles, capabilities of providing different types of
logistics services, service performance and the perceived prospects in Hong Kong. They explain many
forwarders have high capability to provide freight forwarding and traditional logistics service, but they
seem to lack the ability to provide freight forwarding service. Liang et al. (2006) pointed out four critical
service items for ocean freight forwarder. The four service items include operations convenience and
response ability, integrated service, transportation ability and price. Lu (2007) indentifies seven capability
dimensions for liner shipping including purchasing, operation, human resource management, customer
service, information integration, pricing and financial management. Results show four factors are
significant differ between shipping companies and agency: marine equipment, information equipment,
operation and information integration. Stated the downturn of Hong Kong Freight forwarding industry
owing to growing competition and challenge from the neighboring port Yantian and Shekou in Chian,
which operated in a much cheaper way. He suggested a tactical knowledge-based scheduling system
implemented in a local freight forwarder for supporting the scheduling process of a shipping plan.
Tongzon (2009) empirically studied on port choice issue from the freight forwarders’ perspective in South
Asia. Efficiency is found to be the most significant factor followed by shipping frequency, adequate
infrastructure and location; Lun et al. (2009) examine liner shipping from network perspective with an
aim to develop a descriptive framework for operation and development of liner shipping networks. The
framework supports liner shipping companies and their partner for cost and service improvement in
renovating their networks. Shang (2009) empirically studied the organizational learning capabilities in
third-party logistics providers in Taiwan. The results indicate the positive relationship between integration
capability organizational learning capability and service performance. Lu and Yang (2010) empirically
evaluated the crucial logistics service capabilities and firm performance of international distribution
centre operators in Taiwan. Three key capabilities are innovation capability, customer response capability
and flexible operation capability. Bock (2010) proposed a real-time-oriented control approach for freight
forwarders to expand load consolidation, reduce empty vehicle trips, and handle dynamic disturbances.
Feo et al. (2011) explored the preference analysis of Spanish freight forwarders modal choice between
short sea shipping and door-to-door road transport in terms of value of time, value of reliability and value
of frequency in freight transport.

Attribute selection of customer requirement and technical measure

Ministry of Roads and Highways and Ministry of Inland Water Transport (2011) reveals important
service quality items for third party logistics providers in Bangladesh, including speedy delivery, price,
schedule reliability, staff capability, problem handling, logistics solution and information providing
ability. After logistics diagnosis by Bangladeshi logistics consultant committee, several solutions are
proposed such as improving technical support, solution to reduce cost and time, total logistics strategies,
customer service support system and web-based information sharing. Su et al. (2011) explore the logistics
innovation process in the health care supply chain and find the improved process may have positive
impact on performance and financial result. Yang (2012) applied multiple regression analysis to explore
the critical logistics service capabilities for ocean freight forwarders such as logistics service reliability,
logistics value-added service capability, flexibility capability and logistics information capability. These
factors had significant positive effects on financial performance. Propose a domain-specified quality of
service (QoS) model to explore the web service technology of logistics industry with an aim to improve
its business standards. Empirically examines customer relationship management (CRM) and its impacts
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on performance of freight forwarder services in Taiwan. The understanding of relationships among

information technology, client response, knowledge management application, profit and managerial
performance may offer a reference as to how freight forwarders can amend customer relationship to
improve their performance. Vivaldini and Pires (2013) apply business cell approach to fourth party
logistics freight management in Brazil. The results reveal better process integration to reduce cost and
improved performance. Investigate the importance of information communication technology (ICT) to
enhance the competitiveness in the shipping industry. ICT is also considered as the dynamic capabilities
for shipping companies to survive in the complex environment. Supply chain consultant Crimson, says
more demanding standards should be defined to European fresh food supply chains, but the cost may be
high. The standards will define the details if the responsibility is belonging to origins of food, transport
supplier or the retailers. The standards could also help all the party to pay attention to quality and source
of food and monitor the supply chain from food supplier to end customer. Rogerson et al. (2014) propose
the framework and purchase process of freight transport services, and the model suggest three dimensions
such as purchase task, importance ranking and service type. After reviewing the above literature related to
evaluation of the service quality, consulting with the president of leading forwarder companies,
experienced executives, professors as well as shippers, we choose 12 customer requirements (CRs) in
Tables 1 and 12 technical measures (TMs) to evaluate the service quality of freight forwarders in Table 2.
Table 1 is the left part of HoQ, and Table 2 is the upper part of HoQ. In Fig. 2, we lists several key
performance indicators (KPI) and performance indicators (PI) of each technical measure to help decision
makers understand the direction of quality improvement and its managerial meaning.

Methodology
Definition of quality function deployment
QFD is founded by Yoji Akao and first applied by shipping industry for Kobe shipyard for building of a
new oil tanker ship. Following many applications in manufacture, service industry and public
organization make QFD an important and popular methodology for quality improvement. QFD is a
unique methodology to explore the important service quality as well as assessable technical measures for
quality improvement. The house of quality (HoQ) is the main structure to complete QFD research.

Table 1 Customer requirements in the empirical work

Customer requirements Description

1. Instant response Speed to respond customer’s request
2. Cheaper agency fee Offer lower prices for customer.
3. Global service ability Ability to provide global and local service
4. Tailor-made service Provide service according to the request for individual customer
5. Door to door ability Ability to deliver freight to customer’s warehouse or designated location
6. Schedule reliability No delay or cancel of delivery service
7. Consult service Expert consult to provide supply chain and logistics solution
8. Excellent reputation Company has good business records and trustworthy
9. Stable space supply Ability to provide the space or handle large delivery
10. Fast document handling Speed and easiness of documentation handling
11. Instant cargo tracking Provide sophisticated dynamic or on-line tracking
12. Regular visit Commercial visit to VIP customer
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Literature reviews show us several criticism and inadequacy of traditional QFD and how to improve this
method. Therefore, many scholars take advantage of these characteristics and combine QFD with other
techniques such as fuzzy, process management, DEA, AHP, MSE and SERVQUAL to solve service
quality problems. (Duru et al., 2013) The combination of the techniques makes the research result more
accurately and overcomes the original weakness and criticism of QFD method. Vanegas and Labib (2001)
explain the QFD is an important tool to translate the Voice of customer (VOC) into the technical
requirement. He applies the fuzzy numbers to optimize the relationship between customer requirement
and technical requirement for the car door design and manufacture considering the cost, technical and
market factors. Özgener (2003) stresses the evolution and advantage of QFD for product design and
service management. However, the teamwork concept is key factor to make QFD successful because it
will take more time and effort to get the best result. Arash and Chan (2006) improve QFD methodology
by introducing the concept of customer requirement segmentation (CRS) for a four-star hotel. The
contribution is to overcome the problems and difficulties such as ambiguities of VOC, handling of larger
HoQ, conflict of each CR. Chen (2009) innovatively integrates the concept of QFD and process
management techniques to meet customer requirement and company goals in terms of product design,
process management in semiconductor industry.

Table 2 Technical measures in the empirical work

Technical Measures Description

1. Overall information system Implementing the system for information sharing
2. Paperless and simple procedure Easiness and convenience to handle customer paperwork
3. Quality manual and certificate Clear procedure to define corporate goal and job details
4. Customer clearance Efficient custom clearance procedure
5. Service point and network Office or service centre overseas and service route
6. Customer relationship management Work closely with customer to build relationship
and commitment
7. IT implementation Applying new technology to improve efficiency of cargo
operation
8. Human resource management Train potential employees for their valuable contribution in
the future
9. Strong intermodal ability Ability to provide efficient mode combination to complete
delivery
10. Marketing strategy Clear marketing goal to both VIP or general customer
11. Free consulting service Free market and supply chain information consulting

12. Green shipping policy Environmental friendly transport and low CO2 emission
commitment

Process management is an important concept of Six Sigma implementation and may be significantly
improved by applying the QFD method. Ip (2009) creates a model for business succession such as
assessment of current situation of business, successor and competencies analysis and planning of
necessary tasks for future development by utilizing the QFD method. Combine QFD and mean square
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error (MSE) criterion to evaluate the bank service. The important service dimensions are service quality,
staff attitude, information providing, technology and management feature. Pakdil et al. (2012) apply QFD
to analyze the after sales services both qualitatively and quantitatively for a manufacture firms.
SERVQUAL and factor analysis are also used to include the house of quality.

Fig. 2 List of technical measures of international freight forwarder, KPIs and PIs
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Fig. 3 Structure of house of quality

Explore the Spanish small medium sized enterprises to discuss their certified quality management systems
and logistics performances. Their current standard is ISO 9001. The authors proposed the more specific
logistics management standards may be needed to improve the process. Kilibarda et al. (2016) use
SERVQUAL model to evaluate the logistics service quality of freight forwarder. Factor analysis and
ANOVA are conducted to explore best service quality items. Gil-Saura et al. (2018) explore the service
quality of freight forwarder in B2B relationship through ANOVA and SEM process. Archetti and Peirano
(2019) explore air freight forwarders service problem and find the simulation model to optimize its
intermodal service problem.

The QFD framework is proposed to translate customer requirements (CRs) into technical requirements
(TMs) by constructing HoQ matrix as shown in Fig. 3. We could obtain the priority degree of TMs
through computing the sum product of relative weight of each CR. After normalizing the value of result,
the obtained relative weight could show the relationship degree of TM for enhancing customer
satisfaction. The conventional HoQ matrix consists of seven major parts including the customer
requirements (CRs), the priority degree for requirements, technical measures (TMs), the correlation
matrix (between TMs), relationship matrix (between TMs and CRs), sum products of priority degrees and
relationship degrees, wj, and the priority degree of TMs, wnj.

The correlation matrix is mainly practical for developing strategies to improve technical measures. In
some cases, a technical measure has a positive or negative correlation and an improvement may give to
another or deteriorate it. For evaluation of the balance of improvements, correlation matrix signifies such
interactions.

The numerical procedure for assignment of priority degree of TMs is as follows:

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Given m customer requirements signified by CRi, (i = 1,2,…, m) and n technical measures signified
by TMi (i = 1, 2,…, n). Let di (i = 1, 2,…, m) be the priority degree for the ith CRi among the whole set
of CRs, whereas wj (j = 1, 2,…, n) signifying the relative weight of importance of the jth TM, is
determined from the relationship between TMs and CRs. Let R be the relationship matrix between TMs
and CRs, the component Rij signifies the level of impact of the jth TM on satisfaction of the ith CR. The
value of Rij is assigned by an indicator value of 9 (Strong relationship, ■), 5 (Moderate relationship, ▲),
1 (Low relationship, ●) or 0 (No relationship, “ø”).The sum product of the priority degree, di of
the ith CRi and Rij is calculated as follows;

wj=∑i=1mdiRij,j=1,2,…,n

The priority degree for the CRs, di, is defined by an original FAHP process through the pair wise
comparison survey.

In this study, the relative weight of customer requirement is defined by using FAHP and applied to
calculate the technical measures. This combination with FAHP could improve the classic QFD method by
determining the relative weight quantitatively and assessing the relationship between requirements
precisely. Second, the technical measure would be obtained for the priorities of enhancing customer
satisfaction. By analysis and discussion of the result, the meaningful business solution could be proposed
for enhancing customer satisfaction.

Fuzzy analytic hierarchy process

After introducing fuzzy method by Zadeh (1965), Van Laarhoven and Pedrycz (1983) extended analytic
hierarchy process (AHP) by using fuzzy approach to deal with vagueness of human thought for decision
making problem. They used a triangular fuzzy numbers (TFNs) to develop fuzzy-AHP (FAHP) method.
In the FAPH method, the judgement matrix is formed in a pair-wise comparison matrix which is
calculated fuzzy arithmetic and fuzzy aggregation operators and the procedure calculated a sequence of
weight vectors that can be used to choose main attribute. In existing literature, many studies investigate
the decision problems under uncertainty condition by using FAHP methods (Bozbura & Beskese, 2007;
Bulut et al., 2012; Duru et al., 2013; Gumus, 2009). In this paper, Chang’s approach is used for the FAHP
calculation and its algorithm is as follows (Chang, 1996); Let X = {× 1, × 2, …, xn} be an object set and
U = {u1, u2, …, um} be a goal set. According to the method of extent analysis, each object is taken and
extent analysis for each goal is performed, respectively (Chang, 1996). Therefore, m extent analysis
values for each object can be obtained, with the following signs:

M1gi,M2gi,...,Mmgi,i=1,2,…,n,Mgi1,Mgi2,...,Mgim,i=1,2,…,n,
(2)

where all the MjgMgj (j = 1,2, …,m) are TFNs.

The steps of Chang’s extent analysis can be given as in the following:

Step 1: The value of fuzzy synthetic extent with respect to the ith object is defined as

Si∑j=1mMjgi⊗[∑i=1n∑j=1mMjgi]−1Si∑j=1mMgij⊗[∑i=1n∑j=1mMgij]−1
(3)

To obtain ∑j=1mMjgi∑j=1mMgij, the fuzzy addition operation of m extent analysis values for a
particular matrix is performed such as:
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∑j=1mMjgi=(∑j=1mlj,∑j=1mmj,∑j=1muj)∑j=1mMgij=(∑j=1mlj,∑j=1mmj,∑j=1muj)
(4)

And to obtain [∑i=1n∑j=1mMjgi]−1[∑i=1n∑j=1mMgij]−1, the fuzzy addition operation

of MjgiMgij (j = 1, 2, …, m) values is performed such as:
∑i=1n∑j=1mMjgi=(∑j=1mlj,∑j=1mmj,∑j=1muj)∑i=1n∑j=1mMgij=(∑j=1mlj,∑j=1mmj,∑j=1muj)
(5)

and then the inverse of the vector in Eq. (5) is computed, such as:

[∑i=1n∑j=1mMjgi]−1=⎛⎝⎜⎜⎜1∑i=1nui,1∑i=1nmi,1∑i=1nli⎞⎠⎟⎟⎟[∑i=1n∑j=1mMgij]−1=(1∑i=1n
ui,1∑i=1nmi,1∑i=1nli)
(6)

Step 2: The degree of possibility of M2 = (l2, m2, u2) ≥ M1 = (l1, m1, u1) is defined as

V (M2≥M1)=supy≥x⌊min(μM1(x),μM2(y))⌋

and can be expressed as follows:

V(M2≥M1)=hgt(M1∩M2)=μM2(d)={1,ifm2≥m1,0,ifl1≥u2,l1−u2(m2−u2)−(m1−l1),otherwise.V(M2≥M1
)=hgt(M1∩M2)=μM2(d)={1,ifm2≥m1,0,ifl1≥u2,l1−u2(m2−u2)−(m1−l1),otherwise.
(8)

Figure 4 illustrates Eq. 8 where d is the ordinate of the highest intersection point D
between μM1μM1 and μM2μM2. To compare M1 and M2, we need both the values of V (M1 ≥ M2) and
V (M2 ≥ M1).

Step 3: The degree possibility for a convex fuzzy number to be greater than k convex fuzzy Mi (i = 1,2,
…,k) numbers can be defined by.

V(M≥M1,M2,…,Mk)=V[(M≥M1)and(M≥M2)and…and(M≥Mk)]=minV(M≥Mi),i=1,2,3,…,kV(M≥M1,
M2,…,Mk)=V[(M≥M1)and(M≥M2)and…and(M≥Mk)]=minV(M≥Mi),i=1,2,3,…,k (9)
Assume that d’(Ai) = min V (Si ≥ Sk) for k = 1,2, …,n; k ≠ i. Then the weight vector is given by.

Fig. 4 The intersection between M1 and M2

W′=(d′(A1),d′(A2),…,d′(An))TW′=(d′(A1),d′(A2),…,d′(An))T
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(10)

Where Ai (i = 1, 2, …, n) are n elements.

Step 4: Via normalization, the normalized weight vectors are.

W=(d(A1),d(A2),…,d (An))T,W=(d(A1),d(A2),…,d (An))T,

(11)

Where W is a non-fuzzy number.

Table 3 displays the linguistic comparison terms and their equivalent fuzzy numbers in this paper.

The consistency calculation for the FAHP method

Duru et al. (2013) proposed the centric consistency index (CCI) for the consistency calculation of FAHP
method and it is based on geometric consistency index (GCI).

The calculation of CCI is as follows;

Let A = (aLij,aMij,aUij)n × n be a fuzzy judgment matrix, and let

w = [(wL1,wM1,wU1),(wL2,wM2,wU2), …,(wLn,wMn,wUn)]T be the priority vector derived
from A using the RGMM. The centric consistency index (CCI) is computed by

CCI(A)=2(n−1)(n−2)∑i<j(log(aLij+aMij+aUij3)−log(wLi+wMi+wUi3)+log(wLj+wMj+wUj3))2CCI(A)
=2(n−1)(n−2)∑i<j(log⁡(aLij+aMij+aUij3)−log⁡(wLi+wMi+wUi3)+log⁡(wLj+wMj+wUj3))2

(12)

When CCI(A) = 0, we consider A fully consistent. Also provide the

thresholds (GCI¯¯¯¯¯¯¯¯¯¯)(GCI¯) as GCI¯¯¯¯¯¯¯¯¯¯GCI¯ =0.31
for n = 3; GCI¯¯¯¯¯¯¯¯¯¯GCI¯ =0.35 for n = 4 and GCI¯¯¯¯¯¯¯¯¯¯GCI¯ =0.37 for n > 4. When CCI (A)
< GCI¯¯¯¯¯¯¯¯¯¯GCI¯, it is considered that the matrix A is sufficiently consistent. Since the CCI is a
fuzzy extended version of the GCI, thresholds remain identical.

Table 3 The linguistic comparison terms and their equivalent fuzzy numbers
Fuzzy number Linguistic scales Membership function Inverse
Ã1 Equally important (1,1,1) (1,1,1)
Ã2 Moderately important (1,3,5) (1/5,1/3,1)
Ã3 More important (3,5,7) (1/7,1/5,1/3)
Ã4 Strongly important (5,7,9) (1/9,1/7,1/5)
Ã5 Extremely important (7,9,9) (1/9,1/9,1/7)

The prioritization of decision maker

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The weight of each decision makers is different than each other because their experience and thought
about the problem differ from each other. In this paper, therefore, the reverse value of CCI is considered
as their prioritization and it is used the calculation of the aggregated fuzzy judgment matrix for the criteria
of customer satisfactions (Duru et al., 2013).

Let A = (aij)n × n, where aij > 0 and aij × aji = 1, be a judgment matrix. The prioritization method refers to the
process of deriving a priority vector of criteria w = (w1, w2, …, wn)T, where wi ≥ 0
and ∑ni=1wi=1∑i=1nwi=1, from the judgment matrix A.
Let D = {d1, d2, …, dm} be the set of decision makers, and λk = {λ1, λ2, …, λm} be the priority vector of
decision makers. The priority vector of decision makers (λk) is the normalized Ik for the group of experts
which is calculated as follows:

Ik=1CCIkIk=1CCIk

(13)

where Ik is the inverse of the CCI normalization,

λk=Ik∑mk=1Ikλk=Ik∑k=1mIk

(14)

where λk > 0, k = 1,2, …,m, and ∑mk=1λk=1∑k=1mλk=1.

Let A (k) = (a(k)ij)n×n(aij(k))n×n be the judgment matrix provided by the decision maker dk.
w(k)iwi(k) is the priority vector of criteria for each decision maker calculated by
w(k)i=(∏nj=1aij)1/n∑ni=1(∏nj=1aij)1/nwi(k)=(∏j=1naij)1/n∑i=1n(∏j=1naij)1/n

(15)

The aggregation of individual priorities is defined by

w(w)i=∏mk=1(w(k)i)λk∑ni=1∏mk=1(w(k)i)λkwi(w)=∏k=1m(wi(k))λk∑i=1n∏k=1m(wi(k))λk

(16)

where w(w iwi(w) is the aggregated weight vector. After the aggregation process, the extent synthesis
methodology of Chang (1996) is applied for subsequent choice selection.

The empirical study on freight forwarder in South Asia specially in Bangladesh

Several leading freight forwarders are selected to explore for service quality evaluation and technical
measures are used to evaluate customer satisfaction in South Asian region. Selected 15 consultation
experts include professors, president, senior executives and practitioners and the name of company is kept
confidential. The data is collected by email, telephone and personal visits. The consultation is performed
according to the following steps. In the first step, an initial survey is arranged to define the appropriate
customer requirements and technical measures for evaluation. Then, the primary survey is performed to
complete cross relationship matrix in the second step. The FAHP is applied to define relative weight for
the priorities of customer requirement. The expert group is asked to complete a pair wise comparison
survey. Table 4 shows the aggregate fuzzy judgment matrix for the customer requirement. CCI is 0.01
 Student Concluding Seminar two Page 14

which is less than the critical value of 0.37. The top three customer requirements are cheaper agency fee
(0.19), door to door ability (0.16) and instant response (0.15). First of all, “cheaper agency fee” is the top
customer requirement. Forwarders should provide competitive prices by reducing operational cost or
financial planning as Porter’s (1998) cost leadership approach. Second, “door to door ability” shows us
the current customer’s high expectation of forwarder’s logistics solution in terms of time, cost and
reliability. This means forwarders should work closely with partners such as truck, rail or other inland
transportation firms to ensure logistics capability. Third, “instant response “shows the importance of
information providing. Forwarders should have sophisticated tracking system and quick response to
customer’s question.

MANAGERIAL IMPLICATION AND CONCLUSION

The top four relative weights of technical measures are customer relationship management (0.16), overall
information system (0.14), service point and network (0.14) as shown in Table 5. The finding and
proposed practical application could be useful information and supportive function for decision making
process. First, the most important technical measure is “customer relationship management.” Forwarder
business is highly competitive business and may be easily replaced by other logistics service provider.
Interaction and commitment from value customer is indispensable to success in this business.

Second, “overall information system” may be an important tool for reducing cost, instant response and
efficiency improvement. Bjorn et al. (2012) also empirically explore how the information systems
improve maritime logistics from tracking stock level, vessel space allocation, transport and inventory cost
reduction. The utilization can support the decision making from operational, tactical, and strategic levels
within maritime logistics. Therefore, implementing advance information system could effectively support
the customer and enhance the efficiency.

Third, regarding “service point and network”, forwarders may expand its service coverage and network
through more partnerships with major carriers or local logistics service providers. Many global freight
forwarders play the role as a local company, so the local knowledge and expertise becomes a barrier for
market entry. When service and network of forwarder business expands globally, the important of reliable
local partner is indispensible factor for business success. Therefore, the forwarders should not only
cooperate with logistics service providers as well as deeply connect with local stakeholders for serving
their customers.

Table 4 The aggregated fuzzy judgment matrix for customer requirements

 Student Concluding Seminar two Page 15

Table 5 House of quality matrix for customer requirements and technical measures

The result of the research reveals important technical measures for quality improvement of freight
forwarder in South Asian countries specially in Bangladesh, and we collect practitioner’s comments and
feedback regarding to our research findings as managerial implication. They explain the relationship with
customer is particularly significant because the importance of private relationship may be key factor for
long term contract and partnership especially in South Asian countries specially in Bangladesh.
Therefore, strengthen the relationship with shipper may be the primarily mission. On the other hand,
investment of IT facilities is indispensable to maintain the satisfactory service level. The integrated
information system with carriers may help forwarder to improve efficiency. Finally, the comprehensive
service network is also essential to provide shipper the global service. Freight forwarders may strengthen
their network by cooperating with more reliable local partners such as truck or railway firms.

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