Linking ocean container carrier capabilities to shipper–carrier relationships: a case study

Abstract

As outsourcing and offshoring continue to expand, the ocean container industry serves a critical and still increasing role in supporting global trade. Yet, perceived commoditization and intense price competition among ocean container carriers limit opportunities for competitive advantage and formation of long-term shipper–carrier relationships. This environment ultimately yields an unhealthy industry that threatens the stability of global supply chains. Extant literature provides limited insight into how carriers can build strong relationships with shippers to overcome the short-term, transactional-orientation of the industry. Examining a case study of a major ocean container carrier, we apply structural equation modeling to shipper survey data to explore how carrier operational, service, and pricing capabilities influence the strength of the long-term shipper–carrier relationship. Furthermore, we identify unique clusters of shipper needs, helping the carrier understand when and how to promote a particular portfolio of capabilities to customers.