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THE FLEXIBILITY OF LOGISTICS SERVICE PROVIDERS AND ITS IMPACT ON CUSTOMER LOYALTY: AN EMPIRICAL STUDY

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Abstract

The use of logistics outsourcing and the degree of competition in the logistics service industry have significantly increased over the past decade. In order to reach and maintain an important role in such a business environment, logistics service providers (LSPs) have to find ways to achieve competitive advantage. In this regard, the role of flexibility as a potential source of competitive advantage for an LSP is unclear, as empirical research on flexibility in an industrial services context and specifically in logistics outsourcing relationships is lacking. Therefore, using the resource-based view theory as the theoretical foundation, this study develops a conceptual model of flexibility as a capability of an LSP and its impact on customer loyalty, a central outcome for LSPs in a competitive business environment. Further, taking a relational as well as a knowledge perspective with respect to the antecedents of flexibility, the relational capability collaboration and the knowledge resources supply chain partner insight and communication are integrated into the model. Finally, the relationships of collaboration as a capability with knowledge resources as well as with customer loyalty are considered. This study analyzes 155 logistics outsourcing relationships using a survey method and partial least squares structural equation modeling to empirically assess the proposed relationships. The results reveal that LSP flexibility is a strong driver of all core dimensions of customer loyalty (i.e., retention, extension and referrals) and thus a source of competitive advantage for LSPs. Further, collaboration positively influences LSP flexibility and also the loyalty dimensions, supporting its significant role in a supply chain relationship. Finally, knowledge resources have a positive effect on LSP flexibility as well as on collaboration, indicating the importance of such resources in facilitating crucial capabilities.

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