Shipping and Logistics
The primary purpose of this research paper is to establish the underlying reasons why some shipping agents are yet to respond with suitable measures to address the problem of customers spending inordinately long periods of time in lines at shipping agents and related companies, waiting to pay their shipping charges. 1) In recent years, it has been observed that the shipping agencies have been faced with many complaints of dissatisfaction from its customers. This comes against the background that the shipping agencies have been featured highly in the WTO 2008 report on the Ease of Doing Business with Jamaica. http://www. doingbusiness. org/) Customer satisfaction in all businesses, including shipping agencies has implication for the longevity, profitability, image, and stability of the organization and in many instances the country in which they operate. This study should provide the requisite information for the targeted shipping agencies to satisfy their customers while maintaining their share of customers and improving the business image of the country.
The shipping agencies also need to watch their competitors closely, and try to find the marketing strategies that position them most competitively. In light of these events, the shipping agencies continue to be faced with chronically dissatisfied customers. 2) Shipping agencies in Jamaica have had to face the pressure of advances in modern technology by the Internet, the effect of Globalization, and the uncertainty of the financial market; and at all times requiring the implementation of new strategies to add value to the customer experience.
Achieving sustainable customer satisfaction in the shipping agencies has become increasingly challenging; yet some shipping agents have not responded with suitable measures to address the problem of customers spending inordinately long periods of time in lines – one of the main causes of this dissatisfaction. 3) Based on research done by me and empirical data collected during this study, the shipping agencies seems to be placed in a position in which they need to regain the trust of their customers and to prove that they have an interest or desire to satisfy them.
They must respond with efforts and strategies that indicate that it is not business as usual. For this reason, shipping agencies now need to structure their business practices to give them the affordability to institute these well-needed programmes which in fact although may be initially costly will result in better quality customer service in the medium to long term. Providing such services will only be conducive to attracting customers who are more satisfied and loyal, and in the end present a reformed image of doing business in Jamaica.
However, there is now an urgent need for such activities to take place to prevent any further decline in our position on the WTO’s rating scale, and to ensure the shipping industry its rightful place in the commercial sector. Acknowledgements It is with great dignity and pride that I have accomplished this milestone in my career. In sharing the joy I would first like to give thanks to the Creator for His guidance and for giving me the desired strength to persevere. My greatest appreciation to the Caribbean Maritime Institute that afforded me the opportunity to complete my studies while working full time.
A special thanks to all my tutors, technical support staff, Programme Manager, The Board of Directors, Administrators and others who have imparted their knowledge one way or the other in order for me to achieve. Special thanks to Mr. Ibrahim Ajaguma who has played a dual role during my studies, first as my tutor in the field of Marketing Management, Sustainable Development, Introduction to Management, and Organizational Behavior and Ethics and then as my Advisor who gave guidance throughout my dissertation and Mr.
Fritz Pinnock the Executive Director of C. M. I who encouraged and inspired me to stay the course. I also thank the thirty-five respondents who took time out of their busy schedules to complete the questionnaire which forms an important part of my Dissertation. Much appreciation for the use of the Institute’s Library, sample Dissertation, and other aids provided by the Caribbean Maritime Institute in order to assist me with this task.
Last, but in no way least, great appreciation to all the students that I have met and interacted with in class, it was a pleasure working with students from different perspectives, different cultural backgrounds, and at the end of the day we all learnt and communicated effectively without any form of animosity. In this regard credit should be given to all the tutors who demonstrated true leadership qualities; they “walked the talk”. A special thanks to Ms. P.
Williams who provided research services for this project, The Shipping Association of Jamaica, and my family, who have assisted me one way or another in the completion of my Dissertation. TABLE OF CONTENTS Acknowledgements6 INTRODUCTION10 Jamaica’s Commercial Shipping Agents11 Chapter 121 Background to the Study21 The Problem Statement23 Aim of the Dissertation25 Chapter 229 Literature Review29 What is Customer Satisfaction? 30 What is Customer Loyalty? 31 Customer behaviour & CSR responses35 Customer service human resource management39 Customer service office procedures41
Efficient customer service area setup for minimum waiting time43 The Time-based Evolution45 Loyalty Wheel47 Port financing and accounting48 Port Operations and Management50 Henri Fayol Classical Theory51 Time & Motion Study52 Customer through-put at cashier counter53 – Improving Workflow in an Agency53 Ergonomically Designed Customer Service54 Payment automation57 Chapter 361 Methodology for Empirical Collection of Secondary Data61 Data Collection Methods61 Questionnaire Design62 Pilot Study63 Data Collection Using the Questionnaire64 Population and Sample64
Telephone Interviews65 Ethical Consideration66 Researchers:66 Respondents:67 Secondary Data67 Ensuring Reliability & Validity68 Analyzing the Supporting Data70 Chapter 472 Analysis & Results72 Connection to Shipping Agencies73 Primary Agent74 Duration of Doing Business75 Problems Encountered with Agencies77 Satisfaction Experience with Agencies78 Customs78 Resolving the Problems79 Kingston Wharves81 Kingston Container Terminals (KCT)83 Interest in Doing Additional Business85 Loyalty among Customers86 Discussion of Results88 Discussion of Results88 Further Research to be Undertaken93
Chapter 594 Conclusion Statement94 Introduction to Findings of Data Analysis94 Reasons for Lack of Response from Shipping Agencies96 What Needs To Happen97 Chapter 6100 Recommendations100 References:103 APPENDIX112 Customer Satisfaction Survey112 Chapter 1 INTRODUCTION Shipping services constitute a highly competitive market and represent a typical example of customer-oriented organizations. Given the competitive nature of business in the commercial shipping industry in Jamaica; it is clear that customer satisfaction should be a very real priority for such companies.
This is because much more is expected from the customers’ perspectives, and they will switch at any given time to capitalize on added values. This holds contrast to the views of many leaders in the past, especially those in the shipping sector, who thought that once customers were satisfied and their expectations were met, thus ensuring quality service, then there was not much to worry about. Against this background, shipping agents in Jamaica must know what it takes to win customer satisfaction and loyalty, given the competitive nature of the market, both locally and internationally.
However, clearance costs and times are significantly negatively impacted due to the fact that customers spend an inordinately long period of time in lines at shipping agents and related companies waiting to pay their shipping charges. This factor has contributed to the spiraling cost of imports and subsequently the increase in the cost of goods and services to the clearing agent and consumers. This study was conducted on several commercial shipping agents in Jamaica, which include Seafreight Jamaica Ltd. , Caribstar Shipping, Seaboard Jamaica Ltd. , Gateway Shipping, Freight Handlers Ltd. Kingston Wharves, Kingston Container Terminals (KCT), CMA CGM, and the Customs Department. Some shipping agents such as Caribstar Shipping and Kingston Wharves Limited over the years have undertaken measures to improve their customer service offerings through the provision of adequate ergonomics and customer service resources. However, there are still a few shipping agencies that are yet to respond to this overarching problem while others continue to work to find ways to retain satisfied and loyal customers and attract others, giving them the competitive advantage.
Chapter 1 provides a background to the study, the aim of the study, and Research Approach. Chapter 2 addresses Port operations and management; customer service human resource management and office procedure; finance and accounting; customer service ergonomics; efficient customer service area setup for minimum waiting time; customer through-put at cashier counter; customer behaviour and CSR responses; payment automation; Time and Motion Study; Henry Fayol Classical Theory.
Chapter 3 focuses on the data collection process; Chapter 4 shows various analyses of the data; and Chapter 5 presents findings, while Chapter 6 outlines conclusions and recommendations. Jamaica’s Commercial Shipping Agents The five commercial shipping agents being studied have strong images which relate to size, age, brand, etc. Below is a brief profile of these agents. Seafreight Jamaica Ltd. is an agent of Seafreight Agencies located in Miami, Florida. The company likes to think of itself as having a ‘service first’ approach with its fixed-day and full access to North America, the Caribbean and South America.
Their stated objective when it comes to service is to “try to find real-time solutions to the challenges of ocean-cargo transport”. From Florida, the Southeast, the Northeast, Mid-America and throughout the Caribbean and South America region, whether it’s Dry or Refrigerated Containers, Autos, Trucks, Boats, their fleet, in tandem with the Miami and Jacksonville Intermodal centers, coordinate to accomplish this. The SeaFreight Line has evolved to currently operating 5 x 1,000 TEU and 3 x 500 TEU vessels between Florida, the Caribbean and North Coast South American Trades with weekly and bi-weekly fixed-day services.
In its July, 23 2007 edition, the Journal of Commerce placed SeaFreight Line in the 32nd spot in the ranking of Ocean Carriers carrying U. S. Exports to the World for the first quarter 2007 reflecting a 17 % growth in the carriers volume compared with the same period in 2006. Carib Star Shipping is the local representative of Zim Integrated Shipping Services which has four operational headquarters (Port Elizabeth, Cape Town, East London and Durban), an extensive regional office network and agents throughout the world.
To reduce their customers’ total supply chain costs, they have created a network of logistics centers offering full range of services, including freight forwarding, customs brokerage, consolidation and deconsolidation, off-dock container terminals, warehousing, trucking and container repair. Zim has been calling at the Port of Kingston for more than 30 years and is the port’s largest carrier of domestic and transshipment cargo. Carib Star Shipping has been ZIM’s agent in Jamaica for 20 years and has provided the local touch to support the global reach of the carrier. Seaboard Jamaica Ltd. s the Jamaican arm of Seaboard Marine and was incorporated in October 1999, to offer the Jamaican market a more personalized service. Seaboard Marine, established in 1983, is a wholly-owned subsidiary of Seaboard Corporation. Seaboard Marine is able to handle all types of cargo, from heavy equipment, automobiles, vans and trucks to containerized cargo (dry and refrigerated) and less than container loads. In December 2002, Seaboard Marine further cemented its relationship with Jamaica by opening the Seaboard Jamaica Warehouse in Montego Bay and Seaboard Jamaica Montego Bay Division in October, 2004.
The Seaboard mission statement is: “To be the leader in ocean transportation to all the markets we serve. Our existence, progress and success depend on our customers. By creating a positive environment where our employers can work in partnership with our customers, large and small, we shall provide the highest quality service without exception. ” Gateway Shipping International embraces some of Jamaica’s leading companies in port and agency services. The company is located in Newport West in Kingston, the heart of commercial shipping activity in Jamaica.
They also have offices in Montego Bay and Ocho Rios, which are the hubs of the vibrant cruise shipping industry. With the high-quality principals represented, their young, dynamic team offers its customers transportation solutions for worldwide cargo movement. Their stated mission is “to continue to offer the best quality ship and port agency services within the framework of goals and objectives which will satisfy internal and external customers whilst benefiting the company and the wider community”. Freight Handlers Limited was started in 1988, by the husband and wife team Neville and Denise Lyn Fatt.
They currently employ over 28 persons and have two offices in Jamaica – Head office in Kingston and branch office in Montego Bay. They are located in close proximity to the public wharves in both Kingston and Montego Bay. They are the agent in Jamaica for Econocaribe Consolidators Inc; Puerto Rico Freight Systems Inc; TGD Panama; SACO Shipping – Germany; Tradespan Canada, Eternity Group – Far East; Ocean Transport – Costa Rica; NYK Logisitics USA Division; YUSEN Air & Sea USA Division; Goldway – Korea; Allcargo – India, Eculine.
In addition to ocean freight they also handle airfreight (All Air; Air–Ocean or Ocean–Air) and combinations of both ocean and air to reduce transit time from origin to destination and depending on the requirements of the customer. Their stated Mission is to be an efficient reliable and professional provider of the highest quality shipping agency and related services to private and commercial users…. to fully satisfy the requirements and needs of customers, employees, principals and shareholders to the ultimate benefit of the country.
Kingston Wharves (KWL) – Founded in 1945, KWL is one of the Caribbean’s leading multipurpose terminal operators. Listed on the Jamaica Stock Exchange, with net assets of US$54 million, the Company has experienced steady growth and boasts a steady profit stream with a high proportion of retained earning ploughed back into the business. Kingston Wharves Limited operates a terminal in Port Bustamante, just east of and adjoining Kingston Container Terminal. A continuous quay nearly 1,600 meters long provides nine deepwater berths for ro-ro, lo-lo,container, general break bulk and bulk shipping services.
The 25 hectare terminal offers 22 hectare of open storage with 30,000 square meters of covered warehousing and cold storage. The company also has 53,000 square meters of secure off-dock storage for motor vehicles. The Company operates 24 hours per day, 365 days per year. It has highly trained staff and a comprehensive range of terminal equipment, including three Gottwald mobile harbour cranes that are available to perform the most demanding stevedoring functions.
With the emergence of modern terminal management software which maximizes the efficiency of wharf and warehouse operations, the Company utilizes handheld and vehicle mounted computers together with Tideworks yard management software, which has led to a reduction in vessel turn-around. These devices have also enhanced yard management operations and led to more accurate inventory control. KWL subsidiaries include Harbour Cold Stores Ltd, a public cold storage facility; and Security Administrators Ltd, providing security services at the port of Kingston, Montego Bay and Port Antonio.
Committed to continual improvement, Kingston Wharves Ltd has made substantial investments in the past five years upgrading the terminal’s infrastructure and administrative operations. The Company’s modernization programme includes dredging the harbour, which will give rise to deeper drafts, in order to accommodate larger vessels. KWL will then be in a better position to take advantage of marketing opportunities presented by the anticipated growth in international trade and the domestic economy.
The Port of Ocho Rios consists of two facilities: • Reynolds Bauxite Pier owned by BATCO and used at times to dock cruise ships; • A dedicated cruise ship pier owned by The Port Authority of Jamaica and managed by Lannaman & Morris Shipping. The Reynolds Pier is 274. 3 metres long with a recommended vessel draft of 12. 2 metres and accommodates both passenger and cargo vessels. The cruise ship pier has two berths—Berth 1 is 222 metres and Berth 2 is 274. 3 metres long. The recommended draft is 9 and 9. 75 metres respectively.
The Customs Department – It is difficult to pinpoint an actual start date for the collection of customs duties in Jamaica. However, in 1867, a detailed list of duties on imports and exports was established. In 1877, a law was enacted which made provisions for: 1. The establishment of wharves, ports and warehouses 2. The appointment of customs officers 3. The payment of drawbacks, bonds and securities 4. The registration of ships and airplanes 5. Modes of entry required for the importer and or exporter 6. The importation and warehousing of goods
The Collector General’s Department is the first revenue agency to be historically documented. It was appointed in 1868, with the primary responsibility of collecting revenue on all imports with the exception of the Post Master General. It was also responsible for the collection of taxes on income and property, licensing fees and other business related taxes. In 1985, the Jamaican Government established the Inland Revenue Department to promote greater accountability and to augment revenue collection. The Department was divided into the Customs and Excise Department and the Inland Revenue Department.
In October 1991, the Jamaican Government, in conjunction with the World Bank, reorganized the revenue service along functional lines. One element of the reorganization was the further sub-division of the Customs and Excise Department into the Jamaica Customs Department and General Consumption Tax (GCT) Department. The Jamaica Customs Department currently falls under the banner of the Tax Administration Directorate. The Directorate comprises five departments which are: • Inland Revenue Department (IRD), Taxpayers Audit and Assessment Department (TAAD), • Taxpayer Appeals Department (TAD), • Tax Administration Services Department (TASD)and the • Jamaica Customs Department The Role of Customs The Customs Department collects and protects the revenue, guards against illicit imports, and is responsible for: • Assessing and collecting customs duties, fees, and penalties due on imports; • Interdicting and seizing contraband, including narcotics and illegal drugs;
Processing passengers, baggage, cargo and mail; Detecting and apprehending persons engaged in fraudulent practices designed to circumvent Customs related laws; • Protecting Jamaica’s industries, labour and intellectual property rights by enforcing Jamaica’s laws intended to prevent illegal trade practices, including provisions related to quotas; the Anti-Dumping Act; and by providing Customs Records for copyrights, patents, trademarks; • Protecting the general welfare and security of Jamaica by enforcing import and export restrictions and prohibitions, including money laundering. The activities of the Jamaica Customs are governed by the Customs Act.
In addition to its own laws, Customs enforces over 125 other provisions of law for other agencies. Background to the Study The primary purpose of this research paper is to investigate the immediate and remote causes of the problems outlined and why some shipping agencies are yet to respond as appropriate. It will also explore what it will take to attract and win improved customer satisfaction in addition to increasing and retaining customer base in the increasingly competitive shipping environment. In recent years, it has been observed that local commercial shipping agencies have been faced with an increasing base of dissatisfied customers.
This comes against the background that the imposition of new import policies has created more bureaucracy in the system. The Motor Vehicle Import Policy, for instance, is seen by many users of the system as burdensome. Furthermore, when doing business with Customs, there are issues surrounding the valuation branch turn-around time, and the application of WTO rules where submitted values on invoices were constantly being arbitrarily inflated with very little expeditious redress available to the reporter.
One had to pay the marked-up prices or risk having the goods left to the elements. This is also being viewed in the light of the recent Doing Business Report (DBR 2009) – where Jamaica ranked 63rd out of 181 countries surveyed in the 2009, slipping one place when compared to the 62nd ranking received in DBR 2008. Published by the World Bank, the DBR provides quantitative measures of a set of regulations affecting 10 key stages of a business lifecycle. (See Table below, organized in order of performance).
Data in the DBR 2009 are current as of June 2008. Source: http://www. doingbusiness. org/ Some shipping agencies have responded with a variety of solutions but others have not; serious investigation therefore needs to be conducted to ascertain the causes of the lack of response from the agencies involved with the view of possibly reversing the trend. After numerous discussions with the author and authorities from various shipping agencies, it was concluded that no study had been done locally to establish the causes of the phenomenon.
Based on the fact that shipping authorities have remained silent on the issue, it is prudent that a thorough investigation be conducted to find the root causes. It must be realized that the loyalty of the customer within the commercial shipping system has grave implication for the longevity, profitability, image, and stability of any such organization. This study should provide me with the requisite information for the targeted shipping agencies to increase production while maintaining their share of satisfied customers.
In today’s competitive market, the shipping agencies’ goal is not only to win some business from a lot of customers, but also to attract and win a much higher percentage of the business from current customers. In so doing, they must employ different strategies in order to establish what customers really want and to ebb the outflow of their base of satisfied customer. Shipping agencies should also watch their competitors closely, and try to find the marketing strategies that position them most competitively. Irrespective of the foregoing, some shipping agencies continue to ignore the chronic hemorrhaging of satisfied customers.
Conducting extensive research on the matter will help to determine the steps that need to be taken in combating the problem. The Problem Statement A problem definition indicates a specific marketing decision to be classified or problem to be solved. It specifies research questions to be answered and the objectives of research (Zikmund, W. 2003). Clearance cost and times are significantly impacted when customers spend inordinately long periods of time in lines at shipping agents and related companies waiting to pay their shipping charges.
This factor has contributed to the spiraling cost of imports and the subsequent increase in the cost of goods and services to the clearing agent and consumers. Customers have as a result been very dissatisfied and some have sought to move their business to the more efficient and customer friendly shipping agents. Recognizing the impact of the above problem some shipping agencies have undertaken measures to improve their customer service offerings through the provision of adequate ergonomics and customer service resources.
The challenge continues to become more acute as more competitors enter the market and technology continues to advance, while the market strategies get more intense. Markets that were originally serviced almost exclusively by certain shipping agencies are now infiltrated by an increasing number of the competitors, offering more attractive services and costs. The breakdown of hitherto artificial barriers consequent to globalization also presents severe competition. Customers can now move their business from shipping agent to shipping agent within and across the national boundaries, at will.
The end result is that winning customer satisfaction and loyalty in shipping agencies has become a real challenge that no shipping agency can afford to ignore. However fewer shipping agencies are yet to respond to this overarching problem. It is therefore the intention of this researcher to investigate the immediate and remote causes of the problems and why some shipping agencies are yet to respond as appropriate. The research will help to identify the real cause of the lack of response from some agencies, the levels of customer satisfaction, and customer loyalty among shipping agencies.
These findings should be able to guide or create some form of avenue that can be used to add some value to improve the Jamaican shipping system as it relates to customer service. Aim of the Dissertation The primary purpose of the study is to identify the hypothesis, analyze and determine why customers are satisfied or dissatisfied; loyal or disloyal to shipping agencies in Jamaica, and why some shipping agencies have failed to respond to customer service problems identified. The study was carried out on the main shipping agencies in Jamaica which include Seafreight Jamaica Ltd. Caribstar Shipping, Seaboard Jamaica Ltd. , Gateway Shipping, Freight Handlers Ltd. , Kingston Wharves, Kingston Container Terminals (KCT), and the Customs Department. The hypothesis of this dissertation is that the quality of customer service, including ergonomic design, is a significant factor in the satisfying and retention of shipping agencies’ customers. Chapter 2 Literature Review Customer satisfaction and loyalty has been a central topic of both marketing theory and practice for several decades.
Although this phenomenon exists in shipping agencies in Jamaica, there is no evidence of it having been documented whether in the print or electronic media. As competition increases and products and services become more attractive whether by way of image or price, consumers continue to switch from their main agency to capitalize on those opportunities offered by the new entrants in the sector. Loyal and satisfied customers are easy to serve because they understand the modus operandi and make fewer demands on employees’ time (McDaniel & Gates, 2005; Narayandas 1998).
The entire idea of retaining loyal and satisfied customers appears achievable; however, some shipping agencies in Jamaica continue to ignore the factors that will help them win customer satisfaction. This study therefore seeks to examine the various aspects of the process so as to determine why these agencies have failed to respond to the reasons behind disgruntled customers. Relationship creates value for individual consumers through such factors as inspiring greater confidence, offering social benefits, and special treatment (Lovelock, 2004; Bitner, 1992).
There are several other researchers who argue that awards/ incentives help with sustaining customer satisfaction and loyalty (e. g. Griffin, 1997). According to Maxwell (1988), “The greatest things happen only when you give others the credit. ” This can be done by way of awards/incentives, a mere recognition in one form or the other. At the end of this study, I should be able to establish and make recommendation of how Jamaica’s shipping agencies can be motivated to win customer satisfaction and loyalty, reduce their complaints, and increase market share which will in turn maximize profitability.
What is Customer Satisfaction? Customer satisfaction is a business term that measures how products and services supplied by a company meet or surpass customer expectation. It is seen as a key performance indicator within business and is part of the four perspectives of a Balanced Scorecard. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy (Gitman & McDaniel, 2005) There is a substantial body of empirical literature that establishes the benefits of customer satisfaction for firms.
Measuring customer satisfaction provides an indication of how successful the organization is at providing products and/or services to the marketplace. Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service. The state of satisfaction depends on a number of both psychological and physical variables which correlate with satisfaction behaviors such as return and recommend rate.
The level of satisfaction can also vary depending on other options the customer may have and other products against which the customer can compare the organization’s products. According to Bart Allen and Brodeur there are ten ‘Quality Values’ which influence satisfaction behavior, known as the ten domains of satisfaction. These ten domains of satisfaction include: Quality, Value, Timeliness, Efficiency, Ease of Access, Environment, Inter-departmental Teamwork, Front line Service Behaviors, Commitment to the Customer and Innovation.
These factors are emphasized for continuous improvement and organizational change measurement and are most often used to develop the architecture for satisfaction measurement as an integrated model. The usual measures of customer satisfaction involve a survey with a set of statements using a Likert Technique or scale, Sheila Kessler (2003). The customer is asked to evaluate each statement and in terms of their perception and expectation of performance of the organization being measured. What is Customer Loyalty?
The phrase “Customer Loyalty” is used in most if not all service organizations globally. Customer loyalty is the desire on the part of a customer to continue to do business with a given supplier over time (Sargeant & West, 2001), which speaks to a behavioral pattern of the customers rather than their attitude. “A loyal customer has a specific bias about what and from whom they buy” (Griffin, 1997). This type of behavior leads to them coming back, time after time (Sargeant & West, 2001; Griffin, 1997).
Although the concept of customer loyalty speaks to the customer’s behavior than to attitude, (Griffin, 1997), other researchers argue that loyalty is a combination of attitude and behavior (Dick & Basu 1994:101). Jack Welch’s view on this matter is that many writers think that, “the loyalty of a consumer is determined by the strength of the relationship between attitude and behavior so that true loyalty only ensues when levels of both relative attitude and intention to purchase are high”. Irrespective of a customer’s attitude or behavior, building relationships is a challenge and as such loyalty cannot be taken for granted.
It continues only as long as the customer feels s/he is receiving value (Lovelock, Wirtz, 2004; Reichheld, 1990). In order to add such a value all customers should be regarded as your best customers. While building customer loyalty in some organizations may not be challenging, it is not so in the shipping industry. In the process of choosing the right customers, a shipping agency must also recognize the importance of the different loyalty types that exist, which are “No Loyalty, Latent Loyalty, True Loyalty and Spurious Loyalty. (Dekimpe et al. 1997; Kau & Loh, 2006) argues that “no loyalty speak, where both relative attitude and intention to repurchase are low, latent loyalty where attitude is high but purchase behavior, for some or reason, is low and spurious loyalty, which is largely based on behavioral measures. ” Further research identified other writers who explained these loyalties in more detail. Latent loyalty, according to Sargeant & West, 2001 occurs in a situation where the customer does actually feel an element of loyalty to a service provider.
This type of loyalty is driven by normative and situational constraints for e. . a restaurant is chosen based on the occasion whether luncheon, romantic dinner, business talk, etc. True loyalty is defined by Jarkinson (1996) as “the devoted and steadfast attachment of a customer to one supplier, even when attracted to one or more competitive alternative. ” This type of loyalty exists among shipping agency customers and is regarded as genuine according to Julie Baker, “true loyalty makes the customer an advocate for the brand”. No loyalty is seen by Dick & Basu (1994) as a combination of a low relative attitude and no behavioral loyalty indicates an absence of loyalty.
At this level customers move around from one supplier to the other based on offerings, for example sales, however, as soon as it’s over they are gone. Spurious loyalty is otherwise known as behavioural loyalty without attitudinal support. In addressing customer loyalty, it is imperative that we look at customer behaviour as this is one way of measuring loyalty. If loyalty is unaccompanied by a favourable attitude towards a brand or company, customers are more susceptible to switching (Bloemer & Kasper, 1995). Most researchers agree that an attitude has three components: Affect, Behavior, and Cognition, Solomon et al. (2007).
All three components interlink, as ‘Affect’ refers to how the customer feels; ‘Behaviour’ speaks to the person’s intention to do something with regard to an attitude object, and ‘Cognition’ speaks to the way the person mentally processes information in a quest for knowledge. According to De Souza (1992), there are six defectors to loyalty: • PriceCheaper does not necessarily mean better, but customers defect at times because of lower prices elsewhere. The practice is a growing factor among shipping agencies. • ProductInnovation to the same type of product/Service may attract the customer because of shape, size or colour, etc.
Even though the customer knows that the products are the same as the competitors, most times they are drawn to attractiveness or ergonomics. • ServiceQuality service may be better elsewhere for the same price and as such customers switch for quality service which leads to loyalty. • MarketProduct/Service offering may not attract persons living or working in the geographical location • TechnologicalSome customers will be more inclined to try new and faster ways of doing business, e. g. communicating and conducting business via the internet versus physically going to the shipping agency. OrganizationalCustomers can be lost to the organization with which they conduct business based on how they perceive the competition who maintains a larger market share. Based on the nature on shipping business and the way change comes about rapidly it is easy and convenient for customers to access services without a real desire to do so. Therefore, it is imperative for a shipping agency to know its customer. Customer behaviour & CSR responses Research has found that a customer’s decision to be loyal or to defect is the sum of the experience of many small encounters with the service providers (Kotler & Keller, 2006).
This is especially true for shipping agencies. According to John Schermorhorn, Jr. , the three primary things that customers want are: high quality, low cost and on-time delivery. Similar views are shared by Fisk, Grove & John (2000). On the other hand economists argue that the three major things that organizations like shipping agencies want are profitability, security and liquidity. In order for shipping agencies to fulfill these needs, greater emphasis needs to be placed on relationship building which researchers argue is essential to organizational growth.
Shipping agents also need to understand that customers want a relationship with their shipping agencies, where they feel valued and not just offered services. Motivating customers to use a service might be as simple as lowering prices, but motivating them to be loyal means knowing what experiences they are looking for (Julie Barker, 2006). There is no one fit to address this issue, in fact much is based on the country, the culture of the people, who uses the facility and how developed is the country.
It is also the view of some researchers that smart shipping agencies invest in modern technology to give customers more of what they want. While this type of service may be welcomed by several customers, there are still many others who would prefer a personalized relationship with their shipping agencies. This relationship is one that the Jamaican customer demands, and as such maintaining and enhancing relationships with personal customers is one way some shipping agencies could seek to use defensive marketing to increase customer retention.
Additionally, shipping agencies can use different service attributes to influence customer retention and cross selling, for example, commercial customers receiving VIP status for maintaining and guaranteeing a certain level of business monthly. This may start by making it easy to attract and retain customers and their business. Customers like to be associated with an image or brand that is different from others. Image is the way the public perceives the company and its products (Kotler & Keller). Customers know what they want when they see it and that is why ‘seeing is believing’.
For this reason, the company’s image has an important influence on customer satisfaction and loyalty (Zins 2001). According to Kotler & Keller, there are three things that can be achieved by an effective identity. These are: a) Delivery of emotional power beyond a mental image. b) Conveyance through every available communication vehicle and brand contact. c) Diffusion in ads, packaging, brochures, etc. A shipping agency then can market its image by way of Symbols, Slogans, Colours, Shapes, employee behaviour, ergonomics, events, to name a few.
In every competition, the winner must be different in one way or another; therefore, there must be something that differentiates the image. According to Tom Peters “Your personal brand should be “remarkable, measurable, distinguished, and distinctive”. These factors should be considered in the commercial shipping industry, when addressing what customers really want. On the other hand, Laurie Brown (2007) recommends seven qualities of customer care that will win customer satisfaction thus allowing them to conduct and repeat their business and end up being loyal customers. 1.
Accessibility Make it easy for customers to do business with the shipping company. This includes safety, location, communication, environment and the service. 2. Availability Customers should be able to access information 24/7 and conduct business in time convenient to their business hours (Internet access). 3. AffabilityProfessionalism should be evident and customers should feel welcome at al times by all employees. 4. Agreeability‘No’ is not an answer customers want to hear, therefore, creative ways must be sought to let the customers feel that the agent cares. 5. AccountabilityTake ownership of the customer’s needs and issues.
Follow-up is important to resolve issues. 6. AdaptabilityEnvision customers’ needs and exceed their expectations. When this becomes the norm, figure out new ways to delight the customer. 7. AbilityIf all the above has been accomplished, customers will be more willing to accept that you are not perfect. Based on what researchers have to say about what customers want, it is likely that once shipping agencies focus on what customers want and not on what the shipper wants, it will differentiate them from the competition and as such create more satisfied customers for life.
As it relates to some products or services, research conducted by Mark Ritson (2004) revealed that “by giving customers exactly what they want, whenever they want it…firms find themselves in a precarious strategic and societal position”. This position was reached based on the fact that customers are never satisfied and things only get worse”. It should be noted that customer behaviour varies; the needs and desires to be satisfied range from hunger and thirst; to love, status, or even spiritual fulfillment (Solomon, Bamossey, Askegaard & Hogg, 2006).
These researchers further state that consumer behaviour is good business. From a shipping perspective, shippers should remember that the customer is always right even when they are wrong. Shipping agencies should be there for the customer, find someone who can solve the problem, and always under promise and over deliver. Additionally, based on the foregoing, one of the things that a customer wants from his or her shipping agency is relationship, and all relationship is built on trust. Researchers argue that trust in a relationship is the key factor for customer satisfaction and loyalty (Chauchuri and Holbrook, 2001).
To this end customers identify a shipping agency they trust based on the relationship which grows from day to months to years. A recent study from Yankelovich said a customer’s trust is more strongly shaped by direct personal relationship as opposed to indirect channels. Customer service human resource management Competing for market share is big business for shipping agencies, and as such preventing customers from switching is a key factor for an organization. It is therefore important for shipping executives to find out or understand the reasons why customers switch and respond appropriately.
This will better enable the shipping agencies to include customer recovery or prevention in their plan. Several researchers advocate customer relationship management (CRM) as a key factor for customer loyalty. This strategy will generate customer effective commitment and lead to an increase in customer retention, share of wallet and advocacy (Manon & O’Connor, 2007). In recent times shipping agencies in Jamaica have been caught up with high-tech systems which place less emphasis on the personalized relationship which prevents shippers from interacting with customers on a one to one basis.
Manon & O’Connor remind us that effective interpersonal interactions are functions of the assertiveness and affiliation demonstrated during the interaction. This level of interaction leads to customer satisfaction. Therefore a key factor to customer loyalty is the personalized relationship. Shippers should see the need to build positive relationships with customers and “never underestimate the value and reach of a loyal, repeat customer (Gail Goodman). Customer relationships have been widely studied in the academic marketing, argued Morgan & Hunt (1994); Sheth & Paryatiyar (1995).
More and more organizations realize that establishing a personalized relationship with customers builds loyalty. Shipping agencies continue to dominate this thought. In most cases when the relationship that shipping agencies/organizations shared has come to an end, these customers are viewed as being disloyal. Observation can assist in detecting why customers make changes. “A loyal customer has a specific bias about what and from whom they do business” (Griffins, 1997) and it is the opinion of some shipping xecutives that customers must have a reason to change service providers especially after being with an organization for over an extended period. However, one researcher suggests that for shippers to build and retain customer loyalty, the shipping agencies need to see through the customer lens and understand their emotions. It is the belief of many researchers that loyalty is measured by way of repeat customer, but Yanovitch (2000) believes that we must first build before measuring. She argues that “the key to building customer loyalty is to make service excellence a habit”.
She further cited the Greek Philosopher, Aristotle who once said, “We are what we do repeatedly”. In today’s fast moving and changing market “Customer satisfaction is no guarantee of loyalty” (Ganesh et al. , 2000; Griffin, 1997; Vandermerine, 1996). This is evident in Jamaica’s shipping industry. Additionally, they should encourage customers to complain and to make the process of complaining easy which will ultimately build loyalty (Bearden & Teel, 1980). The author highlighted five ways to build customer relationship, which are: 1. Build your own network of customers 2.
Communicate often and early with your customers 3. Use of e-mail 4. Reward loyal customers and they will in turn reward you. 5. Loyal customers are your best sales people It is critical for shipping agencies to explore all avenues in order to establish the key factors that contribute to customer satisfaction and loyalty. Customer dissatisfaction can have a negative impact on a shipping agency’s profitability, market share, stability and growth of the organization, and in economic terms affect the ‘ease of doing business’ indicator in the country. Customer service office procedures
According to Jamier L. Scott (2002), “Customer service is a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer expectation. ” Its importance varies by product, industry and customer; defective or broken merchandise can be exchanged, often only with a receipt and within a specified time frame. Retail stores will often have a desk or counter devoted to dealing with returns, exchanges and complaints, or will perform related functions at the point of sale.
A very popular and effective method for managing customer service office procedure is referred to as workflow management. Workflow management is a system of overseeing the process of passing information, documents, and tasks from one employee or machine within a business to another. Through proper workflow management, each of these employees or machines will pass the work on according to a predetermined procedure. As technology advances, much workflow management has become automated and takes advantage of special software to make the process much smoother.
Workflow management is an important component of a business for a variety of reasons. The primary advantage to workflow management is improved efficiency within the business. By automating many of the processes within a business and establishing a procedure that is consistently followed, unnecessary steps are eliminated, and every member of the team is fully aware of his or her responsibilities. Workflow management also makes it easier to track employee and machine performance. When a link in the chain is broken, it is simple to go back and determine where this occurred.
In addition, workflow management serves to standardize working methods, ensuring that every employee working on the same level is performing the same function. Workflow management improves customer service by providing a consistent product or service that is predictable at every level. It allows the customer to feel completely involved in the entire process and capable of getting answers to important questions in a timely fashion. This can in turn increase company profits, as happy customers come back for repeat business. By using workflow management software, shipping agencies can enjoy increased flexibility.
By tracking processes with workflow management software and inputting various alternative scenarios, these companies can more easily determine viable options for improvement. In addition, the software can be used to examine one small component of workflow or workflow at the company-wide level. This is particularly helpful to large shipping agencies that may have several plants or offices spread throughout the country. Efficient customer service area setup for minimum waiting time In their book, Rules to Break and Laws to Follow, Don Peppers and Martha Rogers, Ph. D. write that “customers have memories.
They will remember you, whether you remember them or not. ” Further, “customer trust can be destroyed at once by a major service problem, or it can be undermined one day at a time, with a thousand small demonstrations of incompetence. ” The issue around queue wait times continues to be a pressing issue for many companies within the shipping industry. Although there is no “World Class Standard” to define the optimal wait time for a customer in queue, there are ways that managers can use to judge operational effectiveness and their ability to deliver a positive customer experience.
Ocean freight transportation is one of the slowest means of transportation. As a result, waiting for valuable shipment can create a most stressful situation for certain customers. Shipping agents need to guarantee consistent follow-up to provide their customers with up-to-date information regarding the status and delivery of their shipments, in accordance with international logistics standards. A time lag causes stress since it is viewed as an unnecessary waste.
This is not a matter of immediate gratification; rather delays–such as standing in line–are viewed as something being wrong with the system, and the company that allows it to happen is perceived as not being up to speed! (Graham, 1996, p. 4). Like time itself, competitive advantage is a constantly moving target. The most successful firms know how to keep moving, always staying alert and proactive. Today, time represents a powerful source of competitive advantage and includes managing time in production and service delivery, in new product development and introduction, and in sales and istribution. All time-based competition (TBC) efforts use process strategies to reduce one or more of the various types of lead times faced by the company. They are implemented using such tactics as team building, organizational flattening, and flexible manufacturing systems and simultaneous engineering. The key challenge facing any company attempting to implement TBC is to insure that there is a proper fit between how the company competes in the marketplace, the specific TBC process strategies selected, and the specific implementation tactics used (Carter, Melnyk & Handfield, 1995).
Time-based competition has evolved from a popular management topic to a historical paradigm to a well-respected philosophy. Empirical research and a growing cadre of books stress the philosophy of time-based management as a way to shorten the order-to-cash cycle, manage the supply chain, speed, product development, and improve customer service (for example: Macdonald, 1991; Inglesby, 1991; `Rapid Modeling … ” 1993; Stalk, 1992; Vickery et al. , 1995; Akemi & Bjorn-Andersen, 1997; and Mohan, Mcginnis, & Ackerman, 1998. The Time-based Evolution
TBC is an evolution of just-in-time (JIT) production techniques popularized in the 1980s and encompassing not just manufacturing systems but the entire value chain, including every stage from the placement of an order to final delivery to the customer. Small batch size and flexibility are JIT hallmarks, as well as requirements for TBC. By competing on time, a company enjoys first-entrant advantages that include higher pricing, higher market share, improved customer service, and productivity improvement. The goal of TBC, like JIT, is to eliminate all wasted time from activities in the value chain.
Such time-reduction methods can be seen in overlapping product development activities through simultaneous engineering, improving communication channels between various functions (including customers and suppliers), through setup times, and smoothing production flow (Park, 1994). The underlying premise of TBC is that the company fastest at responding to market needs will lead the pack. Internally, TBC results in attitudinal shifts as employees see the impact of TBC and how it allows their firm to remain responsive (Donlon, 1989).
While time is a basic business performance variable, traditional management almost never monitors its consumption with the same accuracy as it does sales and costs. Yet time is a more critical competitive yardstick than traditional financial measurements. The service industry has been the leader in time-based competition. The growth of fast-food restaurants, “express” check-out lanes, “instant oil change” and “quick lube” centers for automobiles, “one-hour” photo processing, “one-hour” dry cleaning and “glasses in an hour” demonstrates that at premium prices, these firms are successfully using time-based strategies.
As a competitive weapon, time is equivalent to money, productivity, quality, and innovation. Managing time has enabled top companies not only to reduce their costs but also to offer broad product lines, cover more market segments, and upgrade the technological sophistication of their products and services. The externally focused time-based competitors are well connected to customers through continual feedback on products and services and through attempts to satisfy evolving customer needs.
An external focus helps organizations direct their efforts toward satisfying customers on a just-in-time basis while gaining an advantage over the competition. Companies that had once sought competitive advantage through economies of scale, lower costs, and higher quality now compete on time. Managers and workers can identify their organization’s main sequences, critical processes, and horizontal linkages. Time can be expressed in a variety of ways: cycle time, time to market, new product development time, time elapsed between order placement and payment, and real-time customer responsiveness.
Time-based competitors focus on both activity and system delivery times as measures in all phases of their operations. Efforts to reduce cycle times in all operations can serve as a tool to diagnose other problems such as bottlenecks or deteriorating quality. Sales and service companies such as shipping agencies rely on new customers and repeat business to expand the profits of their businesses. Optimally they hope each new customer will stay on board. The way to ensure repeated business is through better customer service.
When service deliveries are always late it erodes the customers’ satisfaction and confidence. When customers can’t rely on an agent to get service to them in a timely manner it is bound to discourage them and stop them from coming back. When delays are avoidable, agencies need to make amends to customers and assure them it won’t happen again. Giving the customer a discount because of a late delivery lessens the inconvenience, lets the customer know that he is valued, and increases the chances the customer will continue do business with the agency in the future.
Loyalty Wheel This approach to looking at the critical drivers of customer loyalty through use of the Customer Loyalty Wheel is applicable to the study results listed below. In this case the main drivers of customer loyalty are: 1. Quality of service 2. Convenient access by customers 3. Attractive product lines Source: Modified from original by (Reichheld, 2001) Port financing and accounting The 21st century has seen radical changes in the business base underlying port operations.
Increasingly, intense global competition has forced changes in the way all players in the international logistics chain, including ports, do business. Innovative systems and new technology have radically changed requirements for port infrastructure and increased the degree of specialization, raising the financial stakes of port investments and the need for a highly specialized workforce. This impacts on traditional ways of doing business in ports, which are being challenged worldwide by demands for gains in port efficiency; increased customer responsiveness and lower costs to move cargo.
It has also been widely demonstrated that use of private sector companies throughout the range of port operations provides an opportunity to eliminate traditional, bureaucratic operating procedures and controls, and modernize facilities and equipment through new financing channels. It is widely accepted that service providers with operating and administrative experience in other ports have the opportunity to transfer this experience and bring to a port best practices and appropriate modern technologies employed elsewhere.
But even more important, by passing the reins of port operations from the public to the private sector, privatization offers the ability to shift the financial burden of port expansion and development to the beneficiaries of the expenditures. As the ports gain efficiency and the customer responsiveness increases, this eventually leads to customer loyalty which has been linked to profitability Reichheld & Sasser (1990); Anderson & Mittal (2000); Lovelock & Wirtz (2004); Baker (2006) with the main focus being customer satisfaction.
Shipping agencies have also come to realize that relationships with loyal customers have the potential to generate an ongoing stream of profits” (e. g. Lovelock & Wirtz (2006)) and as such different strategies have been employed by some shipping agencies to retain their existing customers while marketing programs are designed to attract new ones. These researchers argue that “achieving profitable growth is impossible without building a loyal base of customers”. One way to do this is by creating value for customers.
Reichheld (2001) states that “creating value for customers builds loyalty, and loyalty in turn builds growth, profit, and more value”. This view is also supported by Fornell (1992), and Reist et al. (1994), whose studies reveal that increased loyalty helps to cement future revenues for companies as well as generate higher customer satisfaction. It is the belief that those shipping agencies that retain their customers for longer periods usually increase profitably while minimizing cost. It has been argued by several researchers that it costs much more to recruit new customers than it takes to retain existing ones.
This view is supported by Coyles & Gokey (2005); Schwab (2004); Ennew & Binks (1996); Capon (2004); Rigby et al. (2003); Lovelock (1983); Hallowell & Roper (1996); Heskett (1995); Blattberg & Deighton (1996); Baesens Betal (2004). This theory is backed by the view that existing customers will purchase products and services over an extended time and indirectly through positive word of mouth communication. Rigby et al. (2003) stated that, “Five percent increase in customer retention increases profit by 25-95%”.
McDaniel and Gates (2005) cited study conducted by Brian & Company which estimated that a 5% decrease in the customer defection rate can boost profits by 25% to 95%. Additionally, cost increase is because funds are used to replace defection. Shippers are of the opinion that retaining customers is the key and the same strategies can be used to increase market share. Studies by researchers agree that different strategies must be applied in order to increase customer market share and to improve overall management at the ports.
Port Operations and Management Ports no longer operate in an insulated environment. They face the same competitive forces that companies in other industries experience. There is rivalry among existing competitors, continuing threat of new entrants, potential for global substitutes, presence of powerful customers and powerful suppliers. Dealing with these forces is a continuing challenge for the port manager. It requires that the port manager be keenly aware of port user requirements, know their constraints in the global market and have a trategy for making the port a partner in business development. Concomitant with globalization and competitive advantage are issues related to achieving successful organizational change, since it holds that any activity to increase an organization’s effectiveness necessarily involves some sort of change. Much of the research attention in the past has focused on strategies for implementing change, including overcoming resistance, rather than developing theories which lead to a greater understanding of the processes of change.
Michael Porter suggests that good managers are thinkers. Yet, for the better part of this century, the classical writers such as Henri Fayol and Lyndell Urwick, among others have suggested that good managers are essentially controllers. The challenge of building leadership, according to Gary Hamel and C. K. Prahalad, is to embed the ambitions for such leadership throughout the company and to create “an obsession with winning” which will energize the collective action of all employees.
The role is to build in such ambition, to help people develop faith in their own ability to deliver on goals, to motivate them to do so, and to channel their energies into a step by step progression that they compare with “running the marathon in 400-meter sprints”. In essence, shipping agency management should conduct and frame their strategy and evaluate it to determine if the existing HR skills can maintain the balance or not. They should also pay more attention towards increasing the efficiencies especially in their customer service offerings. Top CEOs use the cognitive school when conducting such strategy.
They consider and evaluate all the factors and make some prediction about the future. Normally they use the Michael Porter model in which he describes the five forces, which influence industry profitability. These are ‘competitive rivalry; barriers of entry; threat of substitutes; the power of buyers and the power of suppliers’. Henri Fayol Classical Theory In Henri Fayol’s classical theory, he proposed that there are five primary functions of management: (1) planning, (2) organizing, (3) commanding, (4) coordinating, and (5) controlling (Fayol, 1949, 1987).
Controlling is described in the sense that a manager must receive feedback on a process in order to make necessary adjustments. However, several modern day authors contend that the current/ conventional viewpoints on management are insufficient to adapt to a hypercompetitive and fast changing environment. These conventional methods are more appropriate to slower and less aggressive competition, featured by extended periods of stability between disruptions. New methods and management systems are needed by the intricate, rapidly evolving business environment of today.
As economies and organizations become increasingly intricate, as the environment alters more swiftly, and as acceptable response times lessen, the old management structures simply fail to provide gratification. Finally, as a result of the technologically induced changes to work practices, new leadership and management challenges are continuously emerging, and managers need to also use more precise methods in their competitive strategies. Time & Motion Study A time and motion study is a business efficiency technique combining the Time Study work of Frederick Winslow Taylor with the Motion Study work of Frank and Lillian Gilbreth.
It is a major part of scientific management. A time and motion study is conducted to gather timings and factors for each portion of customer visits in an organization. This study draws data from existing management systems as well as special-purpose software built to collect additional data not available in current systems. Multiple regression is then used to analyze these data and determine which factors predict visit lengths, and to develop a model for predicting appointment lengths. This model is then used to assign appointments to different groups with different average lengths.
These groups are then arranged in schedule templates and simulated using Monte Carlo simulation techniques. A schedule template is developed, tested and refined by repeated simulation. Finally, once a schedule template has been finalized, it is used to guide the scheduling of appointments, using a program which assigns appointments to one of the groups named by the schedule template, based on factors available at scheduling time. Customer through-put at cashier counter – Improving Workflow in an Agency A workflow is a model to represent real work for further assessment, e. . , for describing a reliably repeatable sequence of operations. More abstractly, a workflow is a pattern of activity enabled by a systematic organization of resources, defined roles and mass, energy and information flows, into a work process that can be documented and learned. Workflows are designed to achieve processing intents of some sort, such as physical transformation, service provision, or information processing. The definition of throughput is the rate at which something (in this case, customer) can be processed over a period of time.
Many factors can influence improvements in customer throughput at the cashier counter in a shipping agency, which are directed to the overall goal of maximizing sales and reducing the time a consumer spends waiting in line. By maximizing the volume of services sold, shipping agencies are able to compete more effectively because overall prices may be lowered to attract a greater number of customers and still maintain acceptable profits. Moreover, in reducing the time a consumer waits in line at the checkout stand, customer satisfaction increases, tending to improve the probability of that customer returning.
Ergonomically Designed Customer Service Ergonomics is concerned with the ‘fit’ between people and their work. It takes account of the worker’s capabilities and limitations in seeking to ensure that tasks, equipment, information and the environment suit each worker. To assess the fit between a person and their work, ergonomists consider the job being done and the demands on the worker; the equipment used (its size, shape, and how appropriate it is for the task), and the information used (how it is presented, accessed, and changed).
Ergonomics draws on many disciplines in its study of humans and their environments. Within the shipping industry, different styles of check-out counter systems are in use. With increasing labour costs and improved data systems, the pressure for productivity at the check-out locations of this industry has increased dramatically. In the late 1970s, mechanical cash registers were being replaced by integrated points of sales terminals, leading to different work procedures, increased work rates, and reduced labour requirements.
Significant gains in productivity were realized. The resulting check-out counter systems have been typically designed to move products and to provide the customer with needed services. However, little attention has been given to the cashiers who have operated these check-out counter systems. The human doing the job is required to adapt to the system. Apparent incompatibilities between the cashier, the work procedures and the check-out counter design have led to increased health complaints and workers’ compensation claims and disability lawsuits.
The major time loss claim is due to over exertion leading to strains and sprains of the lower back and upper extremities. The real tragedy is that many workers in this environment are suffering from permanently disabling injuries. It is only in recent years that certain of these injuries have been identified as work related. Biomechanical studies indicate that the lower back is vulnerable to continual over stress damage during even moderate load handling, but that the symptoms may not manifest themselves until later in life.
Carpal tunnel syndrome–a present day “buzz word” in this industry– and related injuries such as tendinitis, tenosynovitis and De Quervain’s Disease are apparently caused by injuries which build up gradually over time before symptoms begin to appear. Tasks which are highly repetitive in nature dramatically increase the risk of injury. Fatigue also appears to be one of the underlying causes of many of the symptoms experienced by cashiers at check-out counter systems. There are many human factors affecting the task performed at check-out counter systems, but there is little “hard” data to work with.
It is known that certain repetitive tasks have the potential to cause cumulative trauma disorders, but critical levels of repetitiveness have not been determined, and critical force levels are not known. Although some individuals are far more susceptible to repetitive injuries than others, there is no reliable method of determining who is the most vulnerable. During the last few years, there has been increasing interest throughout the shipping industry in the application of ergonomic principles to the check-out counter system. However, the shipping industry check-out counter systems present ergonomic roblems which do not lend themselves to easy solutions. Working continuously in either a standing or seated position has disadvantages. When working in a standing posture, muscles in the legs, feet and lower back must work constantly to maintain this posture. Heavy loads are placed on the feet. As each major muscle group remains tensed, circulation through these muscles is reduced, nutrient flow to the muscles is restricted, and the chemical products of fatigue build up in the tissues. On the other hand, when working continuously in a seated position, continuous tensing of specific muscle groups occurs.
The best location for a keyboard from an ergonomic viewpoint is directly in front of the cashier, at a height and angle that allows the cashier to operate the keyboard with his upper arm hanging in a relaxed position and the wrist within 15 degrees of a neutral (straight) posture. Keyboards mounted in this way are typically placed directly in front of the cashier’s right shoulder, since the majority of our population are right-handed. For a left-handed operator to use this keyboard the left arm must be extended across in front of the body and the left wrist must be bent back to the left at an uncomfortable angle.
It has been found that for maximum productivity when business is light, the most cost-effective and productive system of processing at the check-out counter is one in which the cashier grasps each item, records its price (either manually with the keyboard or with the use of a laser scanner), then places it directly in a bag for the customer. This is referred to as “direct bagging”. It has the advantage of using only one worker and of handling each item only once. On the other hand, when business becomes heavy, it is advantageous to be able to add manpower, to the process in order to speed customers through the check-out as fast as possible.
Payment automation Current payment systems have developed over a long period of time. However, as in all other industries, payments have recently been experiencing a faster pace of development since the introduction of electronic services. This will probably result in major changes in payment services as of 2010. Payments are basically fund transfer services. The end result of all the different means of payment is that the payer’s account is debited and the payee’s account credited. This is also true for modern cash payments, as payers withdraw cash from ATMs and shops deposit it directly in their bank accounts.
The present process of development means that those in the shipping services customers can expect to see improvements in five different areas: payments will become • faster, • cheaper, • more secure, • easier to send and receive (interface efficiency), and • better integrated to customer systems and processes. The current differences between instruments will disappear when we move to real-time payment processing and to a real-time economy in general, with everybody connected all the time to rapid and low-cost network services.
There will no longer be any need to differentiate technically between different payment instruments, as a credit transfer type of solution accompanied by a payment proposal message can efficiently replace all existing instruments. There is very little information available on the total costs of different payment instruments, which would include the costs for payers, payers’ banks, payees, payees’ banks and interbank infrastructures. Cost differences have little impact on the use of different instruments. More transparent pricing is needed to speed up developments towards more efficient payment habits.
Customers are slow to change their payment habits and need several clear incentives in order to do so. Based on past experience, the average penetration time from start to maturity for a new technical feature such as ATMs or e-banking seems to be about ten years. According to customer survey findings, consumers will react to price differences. The main development needs to appear in the area of customer interfaces, like e-and m-banking, and integration, e. g. e-invoicing support and increased data content. Users could also be more involved in the development of payment services.
The cost of data storage, processing and telecommunication will continue to decrease rapidly, being basically halved every 18–24 months (Moore’s law). New communication methods such as Radio Frequency Identification (RFID) technology will provide new interfacing possibilities, and the bandwidth of long distance wireless communications will be sufficient at low cost for any payment service needs. Many factors point towards mobile (smart) phones becoming our main payment instrument during the 2010s, but this will require good security, addressing and data content standards.
The main problem will be to coordinate the different new technical solutions into a new holistic overall design encompassing all stakeholders. E-payments need to become as standardized and easy to use as e-mails. E-invoicing will completely change invoicing and payment processes and will be the source of very considerable benefits for customers due to the automation of administrative processes. Banks are in a relationship of trust relative to the users of their services, and the World Wide Web community and e/m-commerce will require trustworthy customer identification and payment/delivery guarantee services.
The mobile handset has all the features necessary for becoming the physical payment instrument of the future and can deliver new integrated services such as e-ticketing. Providing mobile payment services will require good cooperation between all stakeholders: banks, telecommunication providers, handset producers and customers. The rapid growth of electronic payments will mean that paper cash will lose its position as a common means of payment. The present rapid technological development will most probably have a major impact on payment services in the 2010s, although customers tend to change their payment habits quite slowly.
The shipping industry authorities have played an important role in establishing current payment habits, and this will probably be the case for future changes as well. It seems clear that the shipping industry is facing major structural and technological changes in this regard, and increased official involvement appears essential in order to speed up developments and control possible negative side effects. In order to increase competition in network-based industries, authorities have to introduce new types of regulations and measures to foster competition.
In general, the major changes currently foreseen will require authorities to update both their policies and their regulations in order to meet future needs. Current payment services are also resource-consuming compared with what the best practice could achieve. Payment services appear to be on the verge of a new electronic era involving major changes. The question now is, how can the changeover from the current situation to new digitalized instruments be made in the most efficient way? Chapter 3 Methodology and Methods Methodology In order to determine why shipping agencies in Jamaica have not responded to the customer service deficit, the author explored various findings in similar areas by conducting library research, newspaper periodicals archives, surveys, interviews, magazines, and other relevant literature. • In order to establish Null Hypothesis, the analysis of the empirical data was the primary basis for determining the correlation between customer service and customer retention. • According to Easton and McColl (1997) on Hypothesis Testing, argue that it represents an “essential part of statistical inference”.
They agree that a “test can only be conducted when a theory is put forward, because it is believed to be true or can be used as a basis for argument; but is not yet proven. • In the case of this study, both review of literature and empirical research was carried out with the aim of testing the hypothesis. • In analyzing the results, the researcher used the SPSS (Statistical Package for the Social Sciences) software to aid in the results. • It has been alleged by Levill et al. that customer satisfaction is an important antecedent of customer relation/loyalty (Levill, 1981; Oliver, Rust & Vank, 1997).
However, at this point the Null Hypothesis will either be accepted or rejected. This assumption is based on the findings from analysis conducted. The scope of my research will analyze and determine why some shipping agencies in Jamaica have failed to respond to the critical customer service issue being faced by them and the resulting fall-out in their customer base. This chapter provides an overview and description of the methodology that was used. It outlines each step and how the study was administered.
It would be remiss of me if I did not include the reliability and validity of the study and how it was conducted. [pic] Data Collection Methods Data collection has been used by several researchers over the years to examine customer loyalty. There are many methods of collecting primary data, some of which include: Questionnaire, Interview, Focus Groups, Observation, and Case-studies, just to name a few. The data collection methods used to measure studies conducted on customer loyalty in Jamaica’s Shipping agencies were done by way of questionnaire, pilot study, and telephone interview.
This was conducted at the highest level of quality. McDaniel and Gates (2005) argue that “The quality of data required is an important determinant of the survey method. ” As such the quality of the data collected was measured in terms of validity and reliability. This data was also measured taking into account the viability and reliability of the study. As a measure of gathering data, I have utilized a fully structured questionnaire although some of the questions are open-ended. The study was conducted by way of qualitative methods.
The study took the form of a pilot study, Questionnaire and telephone interviews. Questionnaire Design The questionnaire was carefully designed taking into consideration the objectives of the study, review of related literature reviews, ease of comprehension, and a need for it to be free from bias, etc. These factors are considered very important because the questionnaire is a powerful and economic evaluation tool that if properly crafted will avoid ambiguity. To maintain confidentiality and anonymity, respondents were requested not to submit their names on the questionnaire.
Copies of the questionnaire were administered online which included contact information for clarification or comment. I ensured that all the required questions were answered and that responses to open-ended questions were appropriate. The advantage of this collection process is that responses can be obtained within a short turn around time and at the convenience of all concerned. Also, any possible doubts that respondents might have regarding any question, can be rectified on the spot. Pilot Study Questionnaire design is said by many writers to be fraught with difficulties and problems.
As such, a pilot study was conducted on a small scale in order to test all the questions. Additionally, the pilot study was conducted to give the researcher an idea of the public view about the topic being studied. The pilot group comprised ten males and females (five each) from the shipping industry. A preliminary check on the demography of the ten revealed that they were from different sections in the industry and ranged between the ages 25-62 years. Two of the members were independently contracted, four employed to major shipping agencies while four employed to custom broker organizations.
The purpose of varying the members of the pilot study was to ensure a loosely structured format; the technique is based on the assumption that individuals are more willing to share their ideas at any level when they are able to hear the ideas of others (Zikmund, W. , 2003). The purpose of the pilot study was to identify and discover ideas that could be used in the questionnaire in order to arrive at the intended result. Zikmund (2005, pp. 250) argues that “Relevance and accuracy are the two basic criteria a questionnaire must meet to fulfill a researcher’s purposes”. The pilot study addresses all of this.
It also provided the researcher with the creativity and flexibility on how the questionnaire should be designed. This information was gathered from the sample of people who took part in the pilot study; the results of which were similar to that of the final study. Data Collection Using the Questionnaire It is argued that there is no ‘best’ research design and there are no hard-and-fast rules to good marketing research (Zikmund, 2003). However, while surveys are often the most common methods of gathering data information, it cannot “achieve success without a well designed questionnaire.
Crawford (1990) argues that questionnaire design has no theoretical base to guide the researcher in developing flawless questionnaire”. Therefore, it is imperative that the pros and cons be taken into consideration. This is where the pilot study plays a vital role. Population and Sample The Custom Brokers Association in the city of Kingston, Jamaica, was targeted to conduct the survey. An online version of the questionnaire was prepared with the aim of reducing the need for more manpower in terms of delivery and capturing of information.
The collection period lasted for seven days and was administered by one person. The size of the population sample was arrived at based on a percentage of the total population of the custom brokers’ membership figure. The targeted shipping brokers have a database of 350, and a 10% sample was chosen for this exercise. “Although a large sample size gives more reliable results than small samples; it is evident that samples of less than one percent of a population can often provide good reliability, with credible sampling procedures” Kotler & Keller (2006).
Therefore, in conducting my research with a database of 350, my intention is to successfully interview ten percent, or 35 customers as this should be considered reliable and credible. The target group comprised male and female over the age of 20 years. Respondents were randomly selected and copies of the questionnaire were completed upon the individual availability and willingness to spend a few minutes to complete the required data online. Telephone Interviews Telephone interview in some parts of the world is seen as a relatively inexpensive way to collect survey data as argued by (McDaniel & Gates, 2005; Kotler & Keller 2006).
In Jamaica, it is definitely very cost-effective to conduct surveys using this process as most persons are easily reached by a mobile phone. The cell phone rates vary, depending on which service provider the phone is registered with. It was decided that thirty interviews would be conducted by phone, which really represents an unstructured interview. The aim was to cause some preliminary issues to surface so that it could be decided what variables needed further in-depth investigation. It would also assist in identifying the critical problems as well as solve or provide solution.
Contacts would be made to several customers and agents via telephone as the majority of customers can be reached through their mobile. However, it should be noted that a disadvantage to this method is that some respondents could somehow terminate the interview without warning or explanation, by hanging up the phone. Nevertheless, this method is viewed as one of the most effective based on the fact that globalization has brought about changes in the world in which we now live and operate. The majority of homes and businesses in the developed world are connected to a telephone network, and the density of mobile phone penetration is reaching saturation point” Hague, Paul et al. With this in mind, it is likely that most respondents would be available for contact via this method. The selection for the numbers used in the telephone interview was furnished to me from a random census list without the persons’ names affixed to the numbers. Forty-three phone numbers were forwarded and the first thirty who answered the questions were used.
Actually only two from the list were not contacted. The telephone interview is regarded as “the mainstay of commercial survey research. Respondents are more willing to provide detailed and reliable information on a variety of topics over the phone than with personal interview” Williams, Zikmund. Ethical Consideration Ethics is an important factor in all business research. This study is no exception when it comes to the ethical issues that needed to be considered in how the research was carried out and what should be done with the results from the research.
Included are the rights and responsibilities of both the researchers and respondents, some of which includes: Researchers: The rights of respondents as private individuals should be respected by market researchers who should recognize them as a part of the research team. Researchers must conform to all relevant national and international laws. They should allow participants to ask questions and to obtain clarification to things they need to clarify. They should not prevent respondents from withdrawing from the research if they express a desire to do so.
Their overall objective is to improve communication and understanding thoroughly. Respondents: Respondents should make decisions without feeling any pressure from the research staff. They should know the purpose of the study and have access to the information. Respondents should be comfortable with the questions being asked by the researchers. The information given by the respondents should be treated strictly confidential regarding his or her privacy. Further, they should not feel forced to respond to the survey. Respondents do have an obligation to be truthful and honest in their responses.
Secondary Data Although primary research was used in order to determine the specific study or problem, accessing secondary data also plays an important role. The secondary data will be used to assist in substantiating the research findings. Secondary data is information that is already available from databases, records, archives, etc. the information is gathered independently of the researcher conducting the current study. It should be noted that the secondary data used in this study is current (less than 6 months).
The use of this data can only enhance the present study and will not be detrimental in any way to this research. The analysis of the empirical data will be the primary basis for determining the correlation between certain shipping agencies’ lack of response and customer satisfaction and retention. Ensuring Reliability & Validity A questionnaire was used in this study to conduct survey in a bid to obtain accurate data to address the problem statement. In order to ensure that the questions are measuring what they intended to, a test is carried out to establish reliability and validity.
Reliability refers to accuracy of a given measurement. In other words, it speaks to the consistency or repeatability of the measures. As such these should be similar when compared with a previous sample of the same nature. Two of the several forms of reliability include: a. “Test-retest reliability – Whether repeating the test/questionnaire under the same conditions produces the same results. b. Reliability within a scale – Which refers to all the questions designed to measure a particular trait are indeed measuring the same traits (McDaniel/Gates, 2005; Pelosi et al. 2001). Below is an image extracted from the text of Pelosi et al. (2001), which clearly demonstrates reliability and validity, and is adapted in this study. [pic] It should be noted that the reliability is concerned with stability and consistency in measurements. Validity, by contrast, refers to whether the given survey questions actually tap into the true underlying concept it attempts to measure. In the case of this research, all the necessary steps have been undertaken to ensure that the resultant data can be trusted.