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A STUDY ON FACTORS THAT INFLUENCE SELECTION OF A LOGISTICS SERVICE

PROVIDER

Conducted For

Worldnet Logistics L.L.C

Dubai

Summer Project Report

Submitted In Partial Fulfilment of the Requirements

FOR THE MASTERS DEGREE IN BUSINESS ADMINISTRATION OF

MANIPAL INSTITUTE OF MANAGEMENT

By

Muhammad Haris NP

Reg. No. 091202020

Under the guidance of

Dr. A.J. Joshua

Year 2010



Manipal Institute of Management

Manipal University

MANIPAL - 576104

DECLARATION

I hereby declare that the summer project entitled “A STUDY ON FACTORS THAT

INFLUENCE SELECTION OF A LOGISTICS SERVICE PROVIDER”, carried out at

Worldnet Logistics L.LC has been submitted during the year 2010 - 2011 under the valuable

guidance and supervision of Dr. A.J. Joshua, Selection Grade Lecturer, Manipal Institute of

Management (MIM), Manipal, in partial fulfillment of the requirements of the Masters of

Business Administration (MBA), Manipal University.

Further I extend my declaration that this report is my original work and has previously not

formed the basis for the award of any degree or diploma.



Place: Dubai, UAE Muhammad Haris

NP

Date: 27 – June - 2010

ACKNOWLEDGEMENT

It gives me immense pleasure to acknowledge and thank all those who have given consistent

guidance, advice and encouragement in my endeavour. I would also like to thank all those

persons who have spent their valuable time to contribute the required information to me and gave

me support while preparing this report.

I gratefully acknowledge my sincere gratitude to Dr. A.J. Joshua for his kind guidance and

helpful suggestions in every stage of the preparation of this report.



I owe my sincere thanks to Mr. V.P. Haris, Business Manager, Worldnet Logistics (L.L.C)

for providing me an opportunity to undertake my project work in their esteemed organization and

to obtain valuable insights about the working of the firm.

I am greatly indebted to Mr. Finoj Kathandy, Operations Supervisor and Muhammad

Shafeek, Operations Supervisor, Worldnet Logistics L.L.C, for their kind guidance and

helpful suggestions.

I also thank other staff members of Worldnet Logistics L.L.C, Dubai for all the support extended

by them.

TABLE OF CONTENTS

EXECUTIVE SUMMARY.................................................................................................................................6

LIST OF CHARTS...........................................................................................................................................8

LIST OF TABLES............................................................................................................................................9



ABBREVIATIONS.........................................................................................................................................10

CHAPTER 1. INTRODUCTION....................................................................................................................1

CHAPTER 2. RESEARCH DESIGN...............................................................................................................5

2.1 TITLE OF THE STUDY:....................................................................................................................6

2.2 BACKGROUND OF THE STUDY......................................................................................................6

2.3 RESEARCH OBJECTIVE..................................................................................................................6

2.4 SCOPE OF THE PROJECT...............................................................................................................6

2.5 HOW THE FACTORS WHERE IDENTIFIED?....................................................................................6

2.6 PARAMETERS OF INTEREST..........................................................................................................6

2.7 SOURCES OF DATA.......................................................................................................................7

2.8 SAMPLING DESIGN.......................................................................................................................7

2.9 COLLECTION OF DATA..................................................................................................................8

2.10 SIGNIFICANCE OF THE PROJECT...................................................................................................8

2.11 LIMITATIONS................................................................................................................................8

CHAPTER 3. INDUSTRY – THIRD PARTY LOGISTICS...................................................................................9

3.1 OVERVIEW.................................................................................................................................10

3.2 HISTORY OF THIRD PARTY LOGISTICS.........................................................................................10

3.3 PROCESS.....................................................................................................................................11

CHAPTER 4. COMPANY PROFILE............................................................................................................12

4.1 VISION........................................................................................................................................13

4.2 MISSION.....................................................................................................................................13

4.3 LEADERSHIP...............................................................................................................................13



4.4 SERVICES OFFERED.....................................................................................................................13

CHAPTER 5. DATA ANALYSIS..................................................................................................................19

5.1 LIST OF CHARTS..........................................................................................................................20

5.2 LIST OF TABLES...........................................................................................................................35

CHAPTER 6. RESEARCH FINDINGS..........................................................................................................44

CHAPTER 7. RECOMMENDATIONS.........................................................................................................47

CHAPTER 8. CONCLUSION......................................................................................................................49

APPENDIX....................................................................................................................................................1

ANNEXURE 1: BIBLIOGRAPHY..................................................................................................................2

ANNEXURE 2: QUESTIONNAIRE...............................................................................................................3



EXECUTIVE SUMMARY

Worldnet Logistics L.L.C is a third party logistics company. Third party logistics is the outsourcing of

all or a part of company’s logistics operations to a specialized company. A 3PL company is a

provider of multiple logistics services for customers operating in various industries locally as

well as globally (e.g. aerospace, automotive, chemicals, consumer products, electronics,

industrial manufacturing, and retail). Sending products from one international destination to another

can involve a multitude of carriers, requirements and legalities. Worldnet Logistics L.L.C is a small scale

third party logistics company with 8 employees. There are around 200 companies in the market which has

the potential to grab the customer segment of Worldnet Logistics L.L.C. The scope of the project is

limited to interviewing the customers of the three service providers (Worldnet Logistics L.L.C, Freight

House L.L.C and Swift Freight international L.L.C.). The objective of the project is to identify the

important factors companies consider and how important is each factor for choosing a service provider for

freight forwarding. It also finds out whether the customers are happy with its existing service provider

and how easy it is for companies to change their service provider. A quantitative research is used to meet

the objectives of the project. 10 factors were identified which influence the selection of a service provider

by interviewing customers and industry experts. A structured questionnaire was administered to a sample

size of 129 companies which was made based on the identified factors. The scale used is Likert and

Anova, Chi-square tests are used for the testing of hypothesis. In the study, Type of universe under

consideration is finite population which consists of all the companies who wants freight forwarding



service and depends upon the three companies Worldnet Logistics L.L.C, Freight House L.L.C and Swift

Freight International L.L.C. The Sampling Method is Stratified random sampling is made use for the

study. The Target Population is Companies who uses freight forwarding services of Worldnet Logistics

L.L.C, Freight House L.L.C and Swift Freight International L.L.C. Worlnet Logistics L.L.C has close to

100 clients, Freight House L.L.C has close to 1000 clients and Swift Freight International L.LC has close

to 2000 clients and the population size is 3100.

From the study, it is found that Quality, On time delivery and Employee Behaviour are the most

important factors whereas credit policy, cost of the service and additional services are the least important

factors. It is also found that companies can change their service provider very easily and in general

customers are not happy with the service they are getting from their existing service provider. In order to

more grab more customers and retain the existing customers, Worldnet Logistics L.L.C should improve

the quality of the services they are providing. It should also provide trainings to its employees on soft

skills and how to interact with the customers. Worldnet Logistics should also create a customer retention

program and a customer service department. Worldnet should try to provide multiple services as majority

of the companies require more than one service. In the budget minimum money should be allocated for

Transportation as only 4.67 % need only transportation services. Separate department should be created

for international services as half of the companies either export or import goods out of Dubai.



LIST OF CHARTS

Chart 5.1.1: Services Availed by different companies...............................................................................20

Chart 5.1.2: Area of operations of different companies.............................................................................21

Chart 5.1.3 : Satisfaction with the existing service provider......................................................................22

Chart 5.1.4: Easiness to change the current service provider.....................................................................24

Chart 5.1.5: Ratings to on time delivery....................................................................................................25



Chart 5.1.6: Ratings to credit policy of the service provider......................................................................26

Chart 5.1.7: Ratings to customized service provided.................................................................................27

Chart 5.1.8: Rating given to Quality of the service....................................................................................28

Chart 5.1.9: Rating given to cost of service...............................................................................................29

Chart 5.1.10: Rating given to existence of defined process in the service provider...................................30

Chart 5.1.11: Rating given to the employee behaviour..............................................................................31

Chart 5.1.12: Rating given to the round the clock service..........................................................................32

Chart 5.1.13: Rating given to additional services provided........................................................................33

Chart 5.1.14: Rating given to domain consultation by the service provider...............................................34

LIST OF TABLES



Table 5.2.1: Statistical data of different factors.........................................................................................35

Table 5.2.2: Importance given to different factors.....................................................................................37

Table 5.2.3: Importance given to factors based on the services the company avail..................................40

Table 5.2.4: Importance given for each factor amongst the companies based on the service they avail. .41

Table 5.2.5: Association of area of operation and the service provider.....................................................42

Table 5.2.6: Association of services availed and the service provider selection........................................42



ABBREVIATIONS

Abbreviation Expansion

L.L.C Limited Liability Company

3PL Third Party Logistics

ISO International Standard Organization

UAE United Arab Emirates

GCC Gulf country council

FOB Freight on Board

AWB Airway Bill Number



CHAPTER 1. INTRODUCTION

1



The council of Logistics Management defines logistics as the process of planning, implementing

and controlling the efficient, effective flow and storage of goods, services, and related

information from point of origin to point of consumption for the purpose of conforming to

customer requirements. Third party logistics is the outsourcing of all or a part of company’s

logistics operations to a specialized company. A 3PL company is a provider of multiple logistics

services for customers operating in various industries locally as well as globally (e.g. aerospace,

automotive, chemicals, consumer products, electronics, industrial manufacturing, and retail).

Moreover, it is a company that usually offers “one-stop shopping” for logistics services with

capabilities to integrate these services in contrast to companies that specialize in a specific area

of services (motor carriers, ocean carriers, public warehouses, forwarders etc.)

Third party logistics companies emerged in Dubai in the 1990s and have been providing valuable

service for companies willing to outsource logistics. Since then the industry has been growing

substantially both in terms of revenues and number of players. Nowadays 3PL market has a

considerable share in total transportation costs and the services provided by 3 PLs continue to

consume a significant portion of overall logistics and supply chain budgets. However, the

industry is not enjoying adequate profits and margins are small. 3PL companies have difficulties

differentiating among each other and have difficulties demonstrating value proposition to

potential customers.

2



This study identifies different factors which companies consider while choosing a service

provider and the average importance given to each factor by companies. This information will

help Worldnet to focus on improving the factors of high importance to companies. As of now

there is no sustainable competitive advantage for Worldnet. Worldnet can formulate a strategy

based on this study to create a sustainable competitive advantage.

The study was done amongst customers of three companies with a sample size of 129. The

different factors were identified by referring to the literature relating to logistics, by interviewing

the employees of Worldnet and by talking to experts in the industry.

The different factors are

1. On time delivery

It measures whether the company is able to deliver the freight on or before promised delivery

date.

2. Credit period

Companies do not pay freight forwarder up front the cost. The payment is done on producing the

invoice. After invoice is given usually there will be minimum 15 days to pay the money either by

cash or cheque. Sometimes freight forwarder accepts post dated cheque as well. This factors

measure the credit period given after the invoice is given.

3. A customized service from a company

Some companies require additional reports for the work they are giving to its freight forwarders.

This factor measures what the average rating is given by companies for a customized service.

4. Quality of service

3



As per ISO 9000 quality can be defined as “Degree to which a set of inherent characteristics

fulfills requirements.”

5. Economic service

It measures the average rating given by companies to the cost they are ready to pay to avail the

service. i.e It measures whether the companies are price sensitive and to what extent.

6. Well defined process

Some freight forwarder will have a defined process for tracking the job requests, place an order

etc. Some companies give importance to knowing the current status of the job.

7. Employee behaviour

It measures how important is employee behaviour of the freight forwarder to the companies.

8. 24/7 availability

It measures whether companies prefer a service which is available round the clock.

9. Additional services like loading and unloading facilities

3PL logistics duty is limited to picking up the goods or shipment and ships it to the destination.

In most of the cases the company or customer should arrange a person for loading or unloading.

But some 3PL companies provide this facility to its customers without any extra cost. This factor

will measure how important is this factor for companies while choosing a service provider.

10. Domain consultation.

Most of the companies need logistics service to run their business. But most of them are unaware

of the document clearance procedure of customs. They need consultation on this. This factor

4



measures whether companies prefer a service provider who provides expert domain consultation

or not.

5



CHAPTER 2. RESEARCH DESIGN

6



2.1 TITLE OF THE STUDY:

A study on factors that influence selection of a logistics service provider

2.2 BACKGROUND OF THE STUDY

Worldnet Logistics L.L.C has not yet done any research to identify the different factors and its priority given by companies for selecting a service provider for their freight forwarding. This study will help Worldnet Logistics to concentrate on top priority factors and grab more customers.

2.3 RESEARCH OBJECTIVE

1. To find out whether the clients are happy with the existing service provider.

2. To find out various factors that influence companies in choosing their service provider for their freight forwarding.

3. To make a comparative analysis between the extent of influence of various factors.

2.4 SCOPE OF THE PROJECT

7



The scope of the project is restricted to study on different factors which clients of three companies consider while choosing a service provider.

2.5 HOW THE FACTORS WHERE IDENTIFIED?

The different factors were identified by referring to the literature relating to logistics, by interviewing the employees of Worldnet and by talking to experts in the industry.

2.6 PARAMETERS OF INTEREST

The average importance (rating) given by companies for each factor while selecting a service

provider for freight forwarding.

2.7 SOURCES OF DATA

Primary data- Would be collected by direct interviewing company representatives using a

structured questionnaire.

Secondary data : This source of data would be used for some historic data to analyse and

prepare the questionnaire. The secondary data used is obtained from discussion with the

employees and using internet.

2.8 SAMPLING DESIGN

8



Type of universe : The type of universe under consideration is finite population which

consists of all the companies who wants freight forwarding service and depends upon the three

companies Worldnet Logistics L.L.C, Freight House L.L.C and Swift Freight International

L.L.C.

Sampling Method: Stratified random sampling is made use for the study.

Target Population : Companies who uses freight forwarding services of Worldnet Logistics

L.L.C, Freight House L.L.C and Swift Freight International L.L.C. Worlnet Logistics L.L.C has

close to 100 clients, Freight House L.L.C has close to 1000 clients and Swift Freight

International L.LC has close to 2000 clients. So the total population under consideration is 3100.

Target Sample Size :

n = Z2σ2N/[ (N-1)e2+Z2σ2]

Where,

N = number of companies who provides business to Worldnet Logistics L.L.C and its two other

competitors. = 3100

Standard deviation σ = Range of population/6 = [5-1]/6=0.67

Error, e = 0.113

Confidence level z ( 0.95) = 1.96

n=(1 . 962×. 672×3100 )

((3100−1)×0 .1132+1.962×0. 672)=129 .45=129

9



Customers of the companies where selected on a proportionate basis.

2.9 COLLECTION OF DATA

Predesigned Questionnaire will be used to collect the information from customer. The survey will be done through phone or in person. Most of the respondents will be contacted over phone.

2.10 SIGNIFICANCE OF THE PROJECT

The project will help Worldnet Logistics L.L.C to concentrate on where the company needs improvement. The study will also help in decision making of future expansion plans.

2.11 LIMITATIONS

The study is limited to the customers of three companies namely Worldnet Logistics

L.L.C, Freight House L.L.C and Swift Freight international L.L.C.

Time taken to the survey is very high as the customers are too busy to answer the survey.

10



CHAPTER 3. INDUSTRY – THIRD PARTY LOGISTICS

11



3.1 OVERVIEW

Third party logistics companies emerged in Dubai in the 1990s and have been providing valuable service for companies willing to outsource logistics. Since then the industry has been growing substantially both in terms of revenues and number of players. Nowadays 3PL market has a considerable share in total transportation costs and the services provided by 3 PLs continue to consume a significant portion of overall logistics and supply chain budgets. However, the industry is not enjoying adequate profits and margins are small. 3PL companies have difficulties differentiating among each other and have difficulties demonstrating value proposition to potential customers.

The council of Logistics Management defines logistics as the process of planning, implementing and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements. Third party logistics is the outsourcing of all or a part of company’s logistics operations to a specialized company. A 3PL company is a provider of multiple logistics services for customers operating in various industries locally as well as globally (e.g. aerospace, automotive, chemicals, consumer products, electronics, industrial manufacturing, and retail). Moreover, it is a company that usually offers “one-stop shopping” for logistics services with capabilities to integrate these services in contrast to companies that specialize in a specific area of services (motor carriers, ocean carriers, public warehouses, forwarders etc.)

12



3.2 HISTORY OF THIRD PARTY LOGISTICS

The main driver of the birth and further development of third party logistics can be contributed to the deregulation of the transportation industry during the 1990s. Prior to deregulation the transportation sector was heavily regulated by government agencies, and these regulations covered practically every phase of a carrier’s business. It included regulation of rates, service offering, equipment, mergers, and acquisitions. The difficulty in obtaining authority to operate and the restrictions ensured lower levels of competition. Due to high competition, industry fragmentation, over-capacity, the growth of internet, and advances in information technology solutions, trucking and other freight companies broadened their service offering from conventional transportation services to material handling, inventory control, order fulfilment, and other value-added services. Many traditional trucking companies started integrating warehousing, logistics, and less-than-truckload (LTL) services into their suite of services, remarking themselves into third party logistics firms. In addition, warehousing firms started broadening their service offerings by developing them internally and/or through alliances, mergers, and acquisitions and positioning themselves also as integrated logistics service providers. Other roots include freight forwarders, customhouse brokers, and transportation brokers.

3.3 PROCESS

13



14



CHAPTER 4. COMPANY PROFILE

15



Worldnet Logistics L.L.C, based in Dubai, United Arab Emirates, has been providing logistics solution since 2006. The company has made a remarkable presence in the industry in Document clearance and GCC transportation (land). Over the years the company has acquired wide range of clients, to a name few, Cater Pillar UAE, GEA, Logwin and most of them corporate clients. We provide a wide range of services which include clearance, delivery and installation using special equipments.

Today the company’s presence is both GCC and international markets. The client base of the company is increasing at an enormous speed.

4.1 VISION

To become one of the best logistics firms in the U.A.E. by providing the most reliable service and by introducing innovative solutions merging expertise, resource and technology.

4.2 MISSION

To work between clients, authorities and agencies making all aspects of freight handling smooth and safe, in keeping with all regulations, and thus building a customer base slowly and steadily.

4.3 LEADERSHIP

Worldnet Logistics was founded in 2006 by Mr. Haris V.P., a shipping & logistics professional with a verifiable, wide range of experience in the industry in Dubai since 1982. After his rather long and educating stints with the Department of Ports and Customs, Dubai for fourteen years and later with global leaders such as STI Middle East and Hanjin Int’l Shipping Co. in freight forwarding companies in Dubai, he established Worldnet. Leveraging on his thorough knowledge of all aspects of Shipping, International Freight Forwarding and Logistics for more than a quarter of a century, the company set out to provide strategic solutions for the clients. Under his dedicated leadership, the Worldnet team has ever since been operating with a remarkable understanding of the client needs, industry regulations and all technical and human aspects of freight forwarding and logistics.

16



4.4 SERVICES OFFERED

Worldnet offers different services which are listed below.

Customs clearance/Customs broking

Customs clearance is a profession that involves the 'clearing' of goods through customs barriers

for importers and exporters (usually businesses). This involves the preparation of documents

and/or electronic submissions, the calculation (and usually the payment) on behalf of the client

of taxes, duties and excises, and facilitating communication between the importer/exporter and

governmental authorities. A customs clearing agent may need to advise an importer regarding

country of origin marking requirements or the precise paperwork requirements for a clothing

shipment subject to quota/visa requirements. Knowing the requirements of each type of import

can avoid costly delays or seizure of the merchandise. Many customs brokers specialize in

certain types of transactions, such as wearing apparel, perishables, or clearing the crew and

manifest of large cargo vessels. Customs brokers can be located at inland "ports" to clear

merchandise sent "in bond" but most are located at major airports and harbors with international

traffic. Customs brokers normally arrange the transhipment or local delivery of cleared

merchandise through relationships with trucking companies and others. Customs brokers must

pass an examination and background check to become licensed. Customs brokers are not

government employees and should not be confused with Customs agents, although in some

countries the term customs agent may mean customs broker.

Custom brokers may be employed by or affiliated with freight forwarders, but may be

independent businesses or may be employed by shipping lines, importers, exporters, trade

authorities and customs brokerage firms.

The customs clearance done by the company includes the following:

17

http://en.wikipedia.org/w/index.php?title=Trade_authorities&action=edit&redlink=1

http://en.wikipedia.org/w/index.php?title=Trade_authorities&action=edit&redlink=1

http://en.wikipedia.org/wiki/Shipping

http://en.wikipedia.org/wiki/Freight_forwarder

http://www.cbp.gov/xp/cgov/trade/trade_programs/broker/brokers.xml

http://en.wikipedia.org/wiki/Harbor

http://en.wikipedia.org/wiki/Airport

http://en.wikipedia.org/wiki/Import_quota

http://en.wikipedia.org/wiki/Country_of_origin

http://en.wikipedia.org/wiki/Excises

http://en.wikipedia.org/wiki/Duty_(economics)

http://en.wikipedia.org/wiki/Taxes

http://en.wikipedia.org/wiki/Export

http://en.wikipedia.org/wiki/Import



The customs clearance services for various import and export consignments include the

following:

Guidance and consultancy on pre and post shipment services

Liasoning and follow up with various Govt Organisations

Documentation procedures i.e. preparation and handling of documents

All post shipment formalities and endorsements

Drawback/DEPB and several other export benefits

Bill Clearance

This is a part of the customs clearance and is the process of clearing the customs bill. Bill

clearance includes entering the complete details about the shipment, payment of the customs

duties and port charges. This is usually done through internet but in case if the website is not

available, it can be done manually.

Road transportation (GCC)

Worldnet Logistics L.L.C assists in making informed choices about the most appropriate mode

of transport for your shipment. Worldnet has formed strong alliances with a number of

international road freight operators, each with strengths in particular geographical areas, and

together it offers its customers a comprehensive flexible and competitive range of services. Also

we are specialized for customers a comprehensive flexible and competitive range of services.

Worldnet is specialized for trucking in all G.C.C countries (Kuwait, Qatar, Saudi Arabia, Oman

and Bahrain)

Air freight – Import and Export

18



Worldnet provides the following services in Air freight.

Consolidation Cargo Handling

Import and Export Custom Clearance

Transportation / Trucking

Door to door Service

Packing and Moving

Warehousing

Sea freight – Import and Export

Worldnet provides the following services in Sea freight

Import and Export FCL Container Handling

Import and Export LCL Cargo Handling

Consolidation Container Handling

Import and Export Custom Clearance

Terminal Service

Transportation / Trucking

Door to door Service

Packing - General and Hazardous Cargo

Transportation and Distribution

Marine Insurance

Personal Effect Shipping and Household Removal19



Warehousing

Cross stuffing

Cross stuffing means moving goods from a small or medium size container to a large container

or vice versa for shipping out of Dubai. This happens in the case of transits.

Transshipment

Transfer of a shipment from one carrier, or more commonly, from one vessel to another where as

in transit. Transshipments are usually made (1) where there is no direct air, land, or sea link

between the consignor’s and consignee’s countries, (2) where the intended port of entry is

blocked, or (3) to hide the identity of the port or country of origin. Because transshipment

exposes the shipment to a higher probability of damage or loss, some purchase orders or letters

of credit specifically prohibit it. Such type of declaration is processed upon arrival of goods in

the country’s port of entry and intended to be transited in cases of ship-shore-ship or air to air.

The declaration shall only be processed by registering such goods due to their transiting to a final

destination without transiting the territories of the country or leaving the customs zone.

Transit

Such a type of declaration is processed for goods being imported from outside the country for the

benefit of an importer from outside the country as well addressed in his name or the name of a

licensed carrier agent by a competent authority on behalf of the importer. The goods shall only

be registered, since it is transiting the territories of the country to the final destination. A deposit

amount equivalent to the total value of goods shall be collected to ensure exit of goods outside

20



the country within 30 days from the date of the transactional processing. Worldnet does the

document clearance for transit.

Free zone documentation

Free zones are part of the country’s territories but considered to be outside the customs territory

and subject to customs control other than normal customs procedures. This is applicable to Jebel

Ali Free Zone, Airport Free Zone, DUCAMZ and unfenced Free Zones including TECOM.

Import into Free Zone:

Free zone licensee are allowed to import goods or equipments into the free zone from a foreign

country without payment of customs duties. Such goods may be stored for an unlimited period of

time depending upon the type of goods and the validity of the Free Zone License.

Import from Free Zone into UAE/GCC:

This type of bills is processed for allowing Free Zone Licensee to sell their commodities to the

Local Companies in UAE or in GCC Countries opeartiong under valide Commercial/Industrial

Licenses from the concerned regulatory authorities with UAE or in GCC. Based on submission

of following documents received from the Free Zone Companies to Customs by the local or

GCC Importer or their appointed Clearing Agents, FZ Transit Out(Ex-FZ Import Bill) shall be

issued upon payment of applicable Customs Duty as per the customs tariff & the processing

charge of AED 60. Free Zone Licensee has to deliver the goods only upon receiving the copies

of the Ex-FZ Import Bill from the importer.

Import for Re-Export from Free Zone (FZ TRANSIT OUT)

21



This type of bills is processed for allowing Free Zone Licensees to sell their commodities to the

Local Companies in UAE operating under valid Commercial Licenses from the concerned

regulatory authorities with UAE on Import for Re-Export basis. This facility will grant the UAE

Importer a grace period to export the goods purchased from the Free Zone Licensees within 180

days from the bill date. A Customs Deposit equivalent to the duty tariff of the invoice value is

collected from the UAE Registered Company against these transactions. Refund the deposit fully

or partially if the proof of export is submitted within the time frame allocated for this type of

bills.

EX-FZ Export Bill (FZ TRANSIT OUT)

This type of bill allows the FZ Licensee to export goods out of GCC by sea, land and air. The

processing charge for this type of bill is normally AED 50 being the registration charge plus

AED 10 being the Knowledge Dirham Fee provided the cargo is being exported other than from

Dubai Airport. The registration charge for processing an EX-FZ Export Bill for the cargo

dispatching through Dubai Airport will be only AED 20.

Free Zone Temporary Admission

This type of Customs bills are prepared in the event facilitating the entry of goods through

customs zones into the country on temporary basis for the purposes of exhibition or repairs and

maintenance of equipment and machineries. A deposit equivalent to customs tariff on total value

of goods shall be collected against such type of transactions.

Free Zone Internal Transfer

This type of Customs bills prepares in the event of sale of goods internally by a free zone

licensee to another free zone licensee having same type of activity upon approval and consent of

the seller and buyer.

22



Export of Goods from local market through Free Zone (FZ TRANSIT IN)

This type of facility shall allow a Free Zone Licensee to buy goods from UAE Local Market for

Export Purposes. In order to validate the entry of goods into the Free Zone, the local exporter

have to file a local export declaration and subsequently, the Free Zone License have to file a Free

Zone Bills of Entry(FZ Transit Bill)

Vehicle Clearance

The cars which get exported to Dubai need customs clearance. Worldnet Logistics L.L.C is a

pioneer in getting the vehicle clearance from the customs.

23



CHAPTER 5. DATA ANALYSIS

5.1 LIST OF CHARTS

5.1.1 Services availed by different companies

Services availed

Frequency Percent Valid PercentCumulative

PercentValid Document

Clearance27 20.9 20.9 20.9

24



Transportation 6 4.7 4.7 25.6

Air-Freight Clearance

22 17.1 17.1 42.6

Sea-Freight Clearance

22 17.1 17.1 59.7

More than one service

52 40.3 40.3 100.0

Total 129 100.0 100.0

Chart 5.1.1: Services Availed by different companies

Inference: 40.31 % of companies avail more than one service. The transportation service availed by companies are very less compared to other services.

5.1.2 Area of operations of different companiesArea of operations

25




PercentValid Domestic 29 1 22.5 22.5 22.5

International

65 50.4 50.4 72.9

GCC 35 27.1 27.1 100.0

Total 129 100.0 100.0

Chart 5.1.2: Area of operations of different companies

Inference: 50.39 % of the companies operate in international market. i.e they either import or export goods out of Dubai.

5.1.3 Are the companies satisfied with their service provider? Is there any significant difference amongst the companies?

Satisfied with the current Provider

26




PercentValid Yes 63 48.8 48.8 48.8

No 66 51.2 51.2 100.0

Total 129 100.0 100.0

Yes

No

Satisfied w ith the current Provider

Pies show counts

W orldnet Logistics L.L.C

50.00%50.00%

Freight House L.L.C

28.57%

71.43%

Swift International L.L.C

59.04%40.96%

Chart 5.1.3 : Satisfaction with the existing service provider

Descriptives

N Mean Std. Deviation Std. ErrorWorldnet Logistics L.L.C 4 1.50 .577 .289Freight House L.L.C 42 1.71 .457 .071Swift International L.L.C 83 1.41 .495 .054Total 129 1.51 .502 .044

Hypothesis:

27



Null Hypothesis H0 = There is no significant difference between the satisfaction level of the three companies.

H1 = There is significant difference between the satisfaction level of the three companies.

ANOVA

Sum of Squares df Mean Square F Sig.

Between Groups 2.589 2 1.294 5.502 .005Within Groups 29.644 126 .235Total 32.233 128

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Inference: 71.43 % customers of Freight House LLC are not satisfied where as only 40.96% of the Swift International LLC customers are not satisfied. 50 % of the Worldnet Logistics LLC customers are not satisfied with the service they are getting. Since the level of significance is less than .05, we reject the null hypothesis. So the proposed hypothesis which states that there is a significant difference between the satisfaction levels of the three companies is supported.

5.1.4 Is it easy for companies to change their service provider?Easy to change the current Provider


PercentValid Yes 103 79.8 79.8 79.8

No 26 20.2 20.2 100.0

Total 129 100.0 100.0

Chart 5.1.4: Easiness to change the current service provider

Inference: A huge 79.8 % of companies can change their service provider easily.

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5.1.5 Ratings given to on time delivery On time delivery

Frequency PercentValid Disagree 6 4.7

Indifferent 10 7.8Agree 56 43.4Strongly Agree

57 44.2

Total 129 100.0

Chart 5.1.5: Ratings to on time delivery

Inference: On time delivery is very important for 44.2 % of the companies. More than 80 % of the companies feel that on time delivery is a very important factor in taking decisions.

30



5.1.6 Ratings given to credit policy of the service providerCredit Policy

Frequency PercentValid Strongly

Disagree20 15.5

Disagree 30 23.3Indifferent 34 26.4Agree 30 23.3Strongly Agree

15 11.6

Total 129 100.0

Chart 5.1.6: Ratings to credit policy of the service provider

Inference: The credit period provided by the service provider is immaterial to the companies while they look to take a decision on the service provider. The majority of the companies are indifferent towards the credit policy of the service provider.

31



5.1.7 Ratings given to customized service Customized Service


Disagree7 5.4

Disagree 16 12.4Indifferent 69 53.5Agree 19 14.7Strongly Agree 14 10.9Total 125 96.9

Missing System 4 3.1Total 129 100.0

Chart 5.1.7: Ratings to customized service provided

32



Inference: More than 50 % of the companies are indifferent towards customized service provided by the service providers.

5.1.8 Ratings given to Quality of the service Quality


Disagree4 3.1


62 48.1

Total 129 100.0

33



Chart 5.1.8: Rating given to Quality of the service

Inference: More than 90 % of the companies agree that quality of the service is very important while choosing a service provider.

5.1.9 Rating given to cost of service the companies should payCost of Service


Disagree35 27.1


4 3.1

Total 129 100.0

34



Chart 5.1.9: Rating given to cost of service

Inference: More than 75 % of the companies are either indifferent or disagree that the cost of the service plays an important role in choosing the service provider.

5.1.10 Rating given to defined processes in the service providerDefined Process


Disagree2 1.6


35 27.1

Total 129 100.0

35



Chart 5.1.10: Rating given to existence of defined process in the service provider

Inference: 55 % of the companies either agree or strongly agree that they like to choose a service provider who has a well defined process for handling the service requests by their clients.

5.1.11 Ratings given to the employee behaviour of the service providers

Employee Behaviour


Disagree4 3.1


36 27.9

36



Total 129 100.0

Chart 5.1.11: Rating given to the employee behaviour

Inference: Employee behaviour of the service provider is a very important factor for deciding the service provider. 75.2% of the companies are in favour of this factor.

5.1.12 Round the clock service availability

24/7 Availability


Disagree9 7.0

Disagree 41 31.8Indifferent 40 31.0

37



Agree 29 22.5Strongly Agree

10 7.8

Total 129 100.0

Chart 5.1.12: Rating given to the round the clock service

Inference: 31.8 % disagree and 31 % are indifferent whether the service is available 24/7.

5.1.13 Additional services offered by service provider to its clientsAdditional services


Disagree20 15.5

Disagree 47 36.4Indifferent 38 29.5

38



Agree 16 12.4Strongly Agree

8 6.2

Total 129 100.0

Chart 5.1.13: Rating given to additional services provided

Inference: Additional services provided by the company do not matter for most of the companies in choosing their service provider.

5.1.14 Domain consultation to the clients

Domain Consultation

Frequency PercentValid Strongly 4 3.1

39



DisagreeDisagree 24 18.6Indifferent 32 24.8Agree 36 27.9Strongly Agree

33 25.6

Total 129 100.0

Chart 5.1.14: Rating given to domain consultation by the service provider

Inference: Domain consultation provided by the companies does not contribute much in choosing a service provider.

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5.2 LIST OF TABLES

5.2.1 Different factors and their ratings given by companiesDescriptive Statistics

N Range Mean Std. DeviationOn time delivery 129 3 4.27 .798

Credit Policy 129 4 2.92 1.248

Customized Service 125 4 3.14 .970

Quality 129 4 4.31 .882

Cost of Service 129 4 2.43 1.144

Defined Process 129 4 3.60 1.121

Employee Behaviour 129 4 3.94 .933

24/7 Availability 129 4 2.92 1.065

Additional services 129 4 2.57 1.088

Domain Consultation 129 4 3.54 1.152

Valid N (listwise) 125

Table 5.2.1: Statistical data of different factors

Inference: The highest average mean rating (4.31) is given to the quality of the service. The lowest rating is given to cost of the service (2.43). The standard deviation is lowest for on time delivery (mean rating = 4.27) and lower for quality. i.e. companies invariably believe that quality and on time delivery are the

41



most important factors in choosing a service provider. All the factors except on time delivery has a range 4. The credit policy of the service provider has a very low rating when it comes to choosing a service provider. Based on the ratings given, ranking of each factor while choosing a service provider for logistics is given below.

1. Quality2. On time delivery3. Employee Behaviour4. Defined process5. Domain Consultation6. Customized service7. 24/7 Availability8. Credit Policy9. Additional Services10. Cost of service

5.2.2 How important is each factor for the customers of different companies when they look for a service?

Assumption: If the average rating is 4 or more, the factor is considered to be important.

One-Sample Statistics

Freight Forwarder N Mean Std. DeviationStd. Error

MeanWorldnet Logistics L.L.C Credit Policy 4 2.50 1.291 .645

On time delivery 4 4.75 .500 .250Quality 4 4.75 .500 .250Cost of Service 4 2.50 1.291 .645Defined Process 4 2.25 .500 .250Customized Service 4 4.00 .816 .408Additional services 4 4.00 1.155 .577Domain Consultation 4 3.75 1.258 .62924/7 Availability 4 3.00 1.826 .913Employee Behaviour 4 4.00 1.414 .707

Freight House L.L.C Credit Policy 39 3.13 1.174 .188On time delivery 39 4.36 .668 .107Quality 39 4.46 .555 .089

42



Cost of Service 39 2.31 1.104 .177Defined Process 39 3.90 1.046 .168Customized Service 39 2.95 .724 .116Additional services 39 2.41 .818 .131Domain Consultation 39 3.54 1.120 .17924/7 Availability 39 2.95 1.123 .180Employee Behaviour 39 4.13 .656 .105

Swift International L.L.C Credit Policy 82 2.89 1.296 .143On time delivery 82 4.22 .875 .097Quality 82 4.18 1.008 .111Cost of Service 82 2.45 1.188 .131Defined Process 82 3.51 1.147 .127Customized Service 82 3.18 1.056 .117Additional services 82 2.61 1.173 .130Domain Consultation 82 3.46 1.157 .12824/7 Availability 82 2.90 1.038 .115Employee Behaviour 82 3.84 1.036 .114

One-Sample Test

Freight ForwarderTest Value = 4

t Df Sig. (2-tailed)Mean

DifferenceWorldnet Logistics L.L.C Credit Policy -2.324 3 .103 -1.50

On time delivery 3.000 3 .058 .75

Quality 3.000 3 .058 .75

Cost of Service -2.324 3 .103 -1.50

Defined Process -7.000 3 .006 -1.75

Customized Service .000 3 1.000 .00

Additional services .000 3 1.000 .00

Domain Consultation -.397 3 .718 -.25

24/7 Availability -1.095 3 .353 -1.00

Employee Behaviour .000 3 1.000 .00

Freight House L.L.C Credit Policy -4.638 38 .000 -.87


Quality 5.196 38 .000 .46

Cost of Service -9.574 38 .000 -1.69

Defined Process -.612 38 .544 -.10

43



Customized Service -9.073 38 .000 -1.05

Additional services -12.135 38 .000 -1.59

Domain Consultation -2.573 38 .014 -.46

24/7 Availability -5.848 38 .000 -1.05

Employee Behaviour 1.220 38 .230 .13

Swift International L.L.C Credit Policy -7.755 81 .000 -1.11


Quality 1.644 81 .104 .18

Cost of Service -11.806 81 .000 -1.55

Defined Process -3.853 81 .000 -.49

Customized Service -7.009 81 .000 -.82



24/7 Availability -9.578 81 .000 -1.10

Employee Behaviour -1.386 81 .170 -.16

Table 5.2.2: Importance given to different factors

Inference:

For Worldnet Logistics L.L.C customers: Quality and on time delivery are the most important factors. The next important factors are customized service, additional services and employee behaviour. Domain consultation, 24/7 availability, credit policy and cost of service are also important. Having a defined to process to serve the customers is not important.

For Freight House L.L.C customers: Quality is the most important factor. On time delivery is the second important factor. Employee behaviour and having a defined process to serve the customers are also important. All the other factors are not important.

For Swift International L.L.C customers: On time delivery is the most important factor. The second important factor is quality. Employee behaviour is also an important factor. All other factors are not important.

Overall, quality of service and on time delivery are the most important factors for all the customers while looking for a service.

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5.2.3 How important is each factor for the customers based on different services they avail?Assumption: If the average rating is 4 or more, the factor is considered to be important.

Services availed N Mean Std. DeviationStd. Error

MeanDocument Clearance Credit Policy 23 3.65 .487 .102

On time delivery 23 4.65 .487 .102Quality 23 4.65 .487 .102Cost of Service 23 1.96 .878 .183Defined Process 23 3.57 1.273 .265Customized Service 23 2.91 .515 .107Additional services 23 2.61 .891 .186Domain Consultation 23 3.43 .992 .20724/7 Availability 23 3.22 1.347 .281Employee Behaviour 23 3.83 .834 .174

Transportation Credit Policy 6 2.33 1.033 .422On time delivery 6 4.00 .894 .365Quality 6 4.33 .516 .211Cost of Service 6 3.33 .516 .211Defined Process 6 3.00 .894 .365Customized Service 6 4.33 .516 .211Additional services 6 3.67 1.033 .422Domain Consultation 6 3.67 1.366 .55824/7 Availability 6 3.33 1.366 .558Employee Behaviour 6 4.00 .894 .365

Air-Freight Clearance Credit Policy 22 2.55 1.371 .292On time delivery 22 4.45 .510 .109Quality 22 4.55 .510 .109Cost of Service 22 2.36 1.177 .251Defined Process 22 3.36 1.177 .251Customized Service 22 2.91 1.192 .254Additional services 22 2.36 1.002 .214Domain Consultation 22 3.50 1.058 .22624/7 Availability 22 2.64 1.177 .251Employee Behaviour 22 4.36 .658 .140

Sea-Freight Clearance Credit Policy 22 3.55 1.371 .292On time delivery 22 4.14 .941 .201

45



Quality 22 4.41 .666 .142Cost of Service 22 2.14 1.082 .231Defined Process 22 3.41 1.141 .243Customized Service 22 3.14 1.521 .324Additional services 22 2.32 1.249 .266Domain Consultation 22 3.41 1.368 .29224/7 Availability 22 3.18 .958 .204Employee Behaviour 22 3.50 1.058 .226

More than one service Credit Policy 52 2.63 1.221 .169On time delivery 52 4.13 .908 .126Quality 52 3.96 1.137 .158Cost of Service 52 2.63 1.253 .174Defined Process 52 3.85 1.055 .146Customized Service 52 3.19 .627 .087Additional services 52 2.67 1.115 .155Domain Consultation 52 3.54 1.146 .15924/7 Availability 52 2.75 .883 .122Employee Behaviour 52 3.98 1.000 .139

Services availedTest Value = 4

t Df Sig. (2-tailed)Mean

DifferenceDocument Clearance Credit Policy -3.425 22 .002 -.35


Quality 6.423 22 .000 .65

Cost of Service -11.163 22 .000 -2.04





24/7 Availability -2.787 22 .011 -.78


Transportation Credit Policy -3.953 5 .011 -1.67

On time delivery .000 5 1.000 .00

Quality 1.581 5 .175 .33

Cost of Service -3.162 5 .025 -.67

Defined Process -2.739 5 .041 -1.00

Customized Service 1.581 5 .175 .33

Additional services -.791 5 .465 -.33

46



Domain Consultation -.598 5 .576 -.33

24/7 Availability -1.195 5 .286 -.67

Employee Behaviour .000 5 1.000 .00

Air-Freight Clearance Credit Policy -4.977 21 .000 -1.45


Quality 5.020 21 .000 .55

Cost of Service -6.521 21 .000 -1.64





24/7 Availability -5.434 21 .000 -1.36

Employee Behaviour 2.592 21 .017 .36

Sea-Freight Clearance Credit Policy -1.555 21 .135 -.45

On time delivery .680 21 .504 .14

Quality 2.881 21 .009 .41

Cost of Service -8.078 21 .000 -1.86





24/7 Availability -4.006 21 .001 -.82


More than one service Credit Policy -8.063 51 .000 -1.37


Quality -.244 51 .808 -.04

Cost of Service -7.859 51 .000 -1.37





24/7 Availability -10.210 51 .000 -1.25

Employee Behaviour -.139 51 .890 -.02

Table 5.2.3: Importance given to factors based on the services the company avail

Inference: For companies who need only document clearance service, quality, on time delivery and employee behaviour are the most important factors. All other factors are not important.

47



For companies who need only transportation, customized service, domain consultation, additional services, 24/7 availability, quality, on time delivery and employee behaviour are the most important factors. All other factors are not important.

For companies who need only air-freight clearance service, quality and on time delivery are the only two important factors.

For companies who need only sea-freight clearance service, credit policy, quality and on time delivery are the important factors.

For companies who need more than one service, employee behaviour, quality, on time delivery and having a defined process are the important factors.

5.2.4 Is there any significant difference for the importance given for each factor amongst the companies based on the service they avail?

ANOVA

Sum of Squares df Mean Square F Sig.

On time delivery Between Groups 4.734 4 1.184 1.912 .113Within Groups 76.770 124 .619Total 81.504 128

Credit Policy Between Groups 24.406 4 6.102 4.328 .003Within Groups 174.819 124 1.410Total 199.225 128

Customized Service Between Groups 11.043 4 2.761 3.136 .017Within Groups 105.645 120 .880Total 116.688 124

Quality Between Groups 11.938 4 2.985 4.222 .003Within Groups 87.659 124 .707Total 99.597 128

Cost of Service Between Groups 11.811 4 2.953 2.351 .058Within Groups 155.740 124 1.256Total 167.550 128

Defined Process Between Groups 7.363 4 1.841 1.487 .210Within Groups 153.475 124 1.238Total 160.837 128

Employee Behaviour Between Groups 8.525 4 2.131 2.566 .041Within Groups 102.979 124 .830

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Total 111.504 12824/7 Availability Between Groups 7.704 4 1.926 1.737 .146

Within Groups 137.521 124 1.109Total 145.225 128

Additional services Between Groups 10.170 4 2.543 2.230 .070Within Groups 141.380 124 1.140Total 151.550 128

Domain Consultation Between Groups .941 4 .235 .173 .952

Within Groups 169.075 124 1.364Total 170.016 128

Table 5.2.4: Importance given for each factor amongst the companies based on the service they avail

Inference: The difference in rating given to different factors is significant only in credit policy, quality, employee behaviour and customized service.

5.2.5 Does area of operation has any association with the service provider selection?Hypothesis:

H0: Area of operation has no association with the service provider selection.

H1: Area of operation has association with the service provider selection.

Freight Forwarder * Area of operations Crosstabulation

Area of operations

TotalDomestic International GCCFreight Forwarder Worldnet Logistics

L.L.CCount 1 2 1 4Expected Count .9 2.0 1.1 4.0

Freight House L.L.C Count 11 18 13 42Expected Count 9.4 21.2 11.4 42.0

Swift International L.L.C

Count 17 45 21 83Expected Count 18.7 41.8 22.5 83.0

Total Count 29 65 35 129

Expected Count 29.0 65.0 35.0 129.0

Table 5.2.5: Association of area of operation and the service provider

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Inference: From the above table, there is no significant difference between the count and the expected count, so there is no association between the area of operation of the company and service provider selection.

Chi-Square Tests

Value dfAsymp. Sig.

(2-sided)Pearson Chi-Square 1.465(a) 4 .833Likelihood Ratio 1.469 4 .832Linear-by-Linear Association

.006 1 .941

N of Valid Cases129

Inference: From the above table, we can infer that the statistical significance ie. .833 is more than the postulated significance that is .05. Hence we accept the null hypothesis. So the proposed hypothesis which states that there is no association between the area of operation of the company and service provider selection is supported.

5.2.6 Does services availed has any association with the service provider selection?

Freight Forwarder * Services availed Crosstabulation

Services availed Total

Freight Forwarder

Document Clearance

Transportation

Air-Freight Clearance

Sea-Freight Clearance

More than one service

Worldnet Logistics L.L.C

Count1 2 1 0 0 4

Expected Count .8 .2 .7 .7 1.6 4.0Freight House L.L.C

Count17 0 8 0 17 42

Expected Count 8.8 2.0 7.2 7.2 16.9 42.0Swift International L.L.C

Count9 4 13 22 35 83

50



Expected Count 17.4 3.9 14.2 14.2 33.5 83.0Total Count 27 6 22 22 52 129

Expected Count 27.0 6.0 22.0 22.0 52.0 129.0

Table 5.2.6: Association of services availed and the service provider selection

Inference: From the cross tabulation we can see that there is a significant different between the count and expected count for some of the services availed and freight forwarder. So we can say that there is an association between the service provider selection and the different type of services company want.

Hypothesis:

Null Hypothesis H0: Type of services a company want has no association with the service provider selection.

Alternate Hypothesis H1: Type of services a company wants has association with the service provider selection.

Chi-Square Tests

Value dfAsymp. Sig.

(2-sided)Pearson Chi-Square 45.594(a) 8 .000Likelihood Ratio 43.744 8 .000Linear-by-Linear Association

12.048 1 .001

N of Valid Cases129

a 7 cells (46.7%) have expected count less than 5. The minimum expected count is .19.

Inference: As the statistical significance (.000) is less than the postulated significance .05, we reject the null hypothesis. So the proposed hypothesis which states type of services a company wants has no association with the service provider selection is not supported.

51



52



CHAPTER 6. RESEARCH FINDINGS

1. 40.31 % of companies need more than one service. The percentage of companies who require transportation is less (Only 4.67%) compared to other services.

2. Half of the companies (50.39%) either export or import goods out of Dubai.

3. 59.04 % of the customers of the Swift International L.L.C are satisfied with the service they are getting. 50 % of the customers of the Worldnet Logistics L.L.C are satisfied with the service they are getting. Only 28.57 % of the customers of the Freight House LLC are satisfied with the service they are getting. The difference between the satisfaction levels of three companies is significant.

4. A huge 79.8 % of the companies can change their service provider easily.

53



5. 87.8 % of the companies believe that on time delivery is an important factor in choosing their service provider.

6. Ranks given to factors that influence the selection of a service provider is given below in the ascending order. Quality, On time delivery and Employee Behaviour are the top three factors.

Factor RankQuality 1On time delivery 2

Employee Behaviour 3Defined Process 4Domain Consultation 5Customized Service 624/7 Availability 7Credit Policy 8Additional Services 9Cost of Service 10

7. The average ratings given to each factor differ from service provider to service provider. But irrespective of the service provider, Quality and On time delivery are the most important factors. For Worldnet Logistics L.L.C customers: The next important factors are customized service, additional services and employee behaviour. Domain consultation, 24/7 availability, credit policy and cost of service are also important. Having a defined to process to serve the customers is not important. For Freight House L.L.C customers: Employee behaviour and having a defined process to serve the customers are also important. All the other factors are not important. For Swift International L.L.C customers: Employee behaviour is also an important factor. All other factors are not important.

8. The average ratings given to each factor differ based on the service a company avail. For companies who need only document clearance service, quality, on time delivery and employee behaviour are the most important factors. For companies who need only transportation, customized service, domain consultation, additional services, 24/7 availability, quality, on time delivery and employee behaviour are the most important factors. All other factors are not important. For companies who need only air-freight clearance service, quality and on time delivery are the only two important factors. For companies who need only sea-freight clearance service, credit policy, quality and on time delivery are the important factors. For companies who need more than one service, employee behaviour, quality, on time delivery and having a defined process are the important factors.

54



9. Even though the ratings given to factors are different for different service providers, the difference is significant only in the case of credit policy, quality, employee behaviour and customized service.

10. The service provider selection has no association with the area of operation( domestic, GCC or international)

11. Companies choose service provider depending upon what kind of service they need.

55



CHAPTER 7. RECOMMENDATIONS

56



Worldnet logistics should:

1. Worldnet should try to provide multiple services as 40.31 % of the companies require more than one service. In the budget minimum money should be allocated for Transportation as only 4.67 % need only transportation.

2. Separate department should be created for international services as half of the companies either export or import goods out of Dubai.

3. Create a customer service department as only half of the customers are happy with the service Worldnet Logistics is providing.

4. Customer retention programmes should be included as 79.8 % of the companies can change their service provider easily.

5. Create a quality control team as all the companies have maximum rating to Quality and On time delivery as the deciding factor while choose their service provider.

6. Provide trainings to Employees as Employee Behaviour is the third important factor while choosing a service provider.

57



58



CHAPTER 8. CONCLUSION

59



Third Party Logistics (3PL) provider handles all or most of freight of the organizations including the management of information by the third party, freeing the company from day to day interaction with carriers, and having to oversee hundreds or thousands of shipment. Like in any other business there are different factors which companies consider while choosing a service provider for their logistics needs. This study has identified different factors which companies consider and the importance given to each factor by different companies. The different factors based on their rank are Quality, Quality, on time delivery, Employee Behaviour, Defined process, Domain Consultation, Customized service, 24/7 Availability, Credit Policy, Additional Services, Cost of service. This study will help the third party logistics providers to concentrate on specific areas of work to improve the customer loyalty. The managers of a third party logistics should concentrate on the quality of service, on time delivery, employee behaviour, in creating a well defined process to provide the service. In order to improve the employee behaviour and productivity, different training sessions can be arranged to the employees. As most of the companies have international operations, companies should implement technological solutions based on internet which will benefit the international customers.

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APPENDIX



ANNEXURE 1: BIBLIOGRAPHY

Books referred

1. P. Saravanavel (2003) , “Research Methodology” Kitab Mahal, Patna India

P 304-312

2. Research methodology – C R Kothari (second revised edition, page

numbers: 55-60, 95-105 and 191-194)

3. Naseha Kanwal, Shakil Ahmed,( June 2009)”Sales Force Automation And

Organization Profitability The Case of Unilever And Dalda Companies”

International Review of Business Research Papers, Vol. 5 No. 4 Pp. 365‐373

4. S L Gupta,(2006), Sales and Distribution Management, Excel Publishers

(page10-55)

Websites

1. http://en.wikipedia.org/wiki/Chi-square_test

2. http://en.wikipedia.org/wiki/Pearson's_chi-square_test



3. http://www.experiment-resources.com/anova-test.html

4. http://www.physics.csbsju.edu/stats/anova.html

5. http://en.wikipedia.org/wiki/Third-party_logistics

6. http://www.iimm.org/knowledge_bank/1_growth-in-logistic-

anoverview.htm

ANNEXURE 2: QUESTIONNAIRE

Name:

Address:

Phone:

Email ID:

Type of services the company uses:

1. Document clearing

2. Transportation

3. Air – freight clearance

4. Sea freight clearance

5. More than one serviceArea of operations:

1. Domestic

3. GCC



2. International

1. Are you satisfied with the existing service provider?

Yes No

2. Is it easy for you to change your service provider if you want?

Yes No

How would you rate the following factors? (Choose from a scale of 1 to 5)

5. Strongly Agree 4. Agree 3. Indifferent 2. Disagree 1. Strongly Disagree

3. On time delivery is very important

4. Credit period for the payments for both customs duty and service charge affects my decision making

5. A customized service from a company will impact my decision making

6. Quality of the service is very important

7. I prefer an economic service even if the service is slow.

8. I like the companies which have a well defined process for the service processing

9. I like companies whose employees behave cordially

10. I like service which is available round the clock(24/7)

11. I prefer companies who provide additional services like loading, unloading facilities.

12. I prefer companies which provide consultation about customs/shipment procedure.

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