(This contributed article is based on a 2024 research material that first appeared on Logistica: An International Journal of Customs Administration and Trade Facilitation.)
Customer satisfaction is a key factor in the success of ocean freight forwarders. Satisfied customers are more likely to use trusted, reputable ocean freight forwarders, thereby increasing customer loyalty. The Philippines’ ranking of 43rd out of 139 countries in the 2023 Logistics Performance Index (LPI), however, underscores the need for enhanced competence in the country’s logistics sector, particularly freight forwarding. This is crucial for meeting exporter expectations and building trust.
According to a May 2024 study entitled “Service Reputation and Customer Loyalty in Ocean Freight Forwarders: An Exporters’ Perspective in Mindanao Regions” by Xavier University – Ateneo de Cagayan, School of Business and Management, almost 10% of Mindanao exporters are unsatisfied with the technical services offered by ocean freight forwarders (specifically in the area of order accuracy and condition).
The study also presents several policy recommendations to help local forwarders achieve efficiency. Among these is the need to review existing forwarder services at the same time review the process of accreditation/registration of members by the Philippine International Seafreight Forwarders Association (PISFA*). Specifically, the study pushes for accrediting forwarders who follow international standards on technical aspects of services, ensuring they adhere to best industry practices and operate only at the highest level of professionalism.
Furthermore, the study notes that almost 12% of exporters are unsatisfied with timeliness, which encompasses the accuracy of delivery time, delivery on promised time, and short backorder time.
The study recommends that the Department of Trade in Industry’s Fair-Trade Enforcement Bureau (DTI-FTEB) enhance the capabilities and competitiveness of local forwarders by studying best practices in other countries, such as those in Southeast Asia, and adapting and implementing the same locally. In addition, DTI-FTEB can provide support and resources for local forwarders’ capacity building and skills development.
Improving the efficiency of local ocean freight forwarders requires a number of things — a rethink of processes and amendment of policies that do little to improve the reputation of forwarders; establishing connections with other stakeholders; developing efficient transportation routes and strategies to optimize the technical aspect of services and freight movement; and minimizing delivery times.
From the perspective of Mindanaon exporters, this strategic approach is recommended to inspire confidence in the potential for long-term success and growth in the forwarding industry.
(*PISFA is now the Philippine Multimodal Transport and Logistics Association, Inc. – ed)
Sergiris Ortega is a graduate of Doctor in Business Management at Xavier University De Cagayan in Corrales Avenue, Cagayan de Oro City, Philippines, and the Master Administration – Accelerated Program for Executives at Ateneo de Davao Davao City, Philippines.
He also completed an Executive Program in Applied Business at the Massachusetts Institute of Technology Sloan School of Management Massachusetts, United States.
For questions or comments email sergiriso@gmail.com.
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