Literature Review

INTERCONTINENTAL JOURNAL OF MARKETING RESEARCH REVIEW
ISSN:2321-0346 - ONLINE ISSN:2347-1670 - PRINT -IMPACT FACTOR :1.590

VOLUME 4, ISSUE 3, MARCH 2016
A STUDY ON EXPORTERS SATISFACTION TOWARDS FREIGHT

FORWARDERS IN KARUR
S.SWATHY
Master of International Business, GRD School Commerce and International Business, Coimbatore.
ABSTRACT
A freight forwarder, forwarder, or forwarding agent, also known as a non-vessel operating
common carrier (NVOCC), is a person or company that organizes shipments for individuals
or corporations to get goods from the manufacturer or producer to a market, customer or final point of
distribution. The study was undertaken in order to know about the exporter‘s satisfaction towards the
service rendered by the freight forwarders. And also to know about the charges levied by the service
providers and major problems faced by the exporter‘s from their service providers. This study was
also conducted to know about the factors which customer expect from their freight forwarder. And
also to identify the satisfaction level of the customers towards the factors like documentation,
insurance, packaging, safety, freight rates, warehousing and prompt service. This study was
descriptive in nature and it includes surveys, facts and findings. Data was collected using a developed
and validated questionnaire. The study chooses exporters in the Karur district and the respondents
were selected randomly and also to the convenient. The collected data was analysed using simple
percentage analysis, weighted average and Garrett ranking method. Results are presented in the
tabular form and they are interpreted. The time period in which the research was conducted is between
December 2015 - March 2016.
Key words: freight forwarding, freight rates, warehouse and infrastructure facilities, safety.
INTRODUCTION:
Logistics is the management of the flow of goods between the point of origin and the point of
consumption in order to meet some requirements, of customers or corporations. The resources
managed in logistics can include physical items, such as food, materials, animals, equipment and
liquids, as well as abstract items, such as time, information, particles, and energy. Freight forwarders
are the firm specializing in arranging storage and shipping of merchandise on behalf of its shippers. It
usually provides a full range of service including: tracking inland transportation, preparation of
shipping and export documents, warehousing, booking cargo space, negotiating freight charges,
freight consolidation, cargo insurance, and filling if insurance claims. Freight forwarders usually ship
under their own bills of lading or air waybills (called house bill of lading or house air waybill) and
their agents or associates at the destination (overseas freight forwarders) provide document delivery,
deconsolidation, and freight collection services.
A freight forwarder, forwarder, or forwarding agent, also known as a non-vessel operating common
carrier (NVOCC), is a person or company that organizes shipments for individuals or corporations to
get goods from the manufacturer or producer to a market, customer or final point of distribution.
Freight forwarders are the important players of international trade in the current scenario. These
service providers make you free from the stress of whether the good with reach the buyer on time or
not. Freight forwarders will take the entire responsibility of transferring the goods safely and on time.
www.icmrr.org 17 icmrrjournal@gmail.com
REVIEW OF LITERATURE:
According to D‘este and Meyrick (1992) argued that forwarders attached a much greater
importance to the cargo handling technology and to the availability of flexible contracts. Also they
have significant investment in cargo handling technology than shippers.
According to Lambert and Stock (1993) added that freight forwarders offer shippers lower
rates than the shippers could obtain directly from the carrier, because small shipments generally cost
more to transport than large shipments.
According to Matear and Gray (1993) Forwarders act as a carrier to the shipper and
consignee, but they use railroads and sometimes motor carriers for the long haul portion of the
carriage. Freight suppliers are either freight forwarders acting as freight supplier intermediaries, or
international carriers, or organisations undertaking both forwarding and carriage which are sometimes
called forwarder/operators.
According to Pedersen and Gray (1998) indicated that small companies mostly contract out
the transportation function completely to freight forwarders.
According to Joseph (2001) has conducted a study on, ―Influence of Logistics Firms in
International Trade‖. He says that every trade is possible only with the help of logistics advisories
because those people are very experienced and professionally trained in logistics activity. He
concluded that all the logistics firms should facilitate as much as possible to the exporter and
importer.
Eswari (2002) conducted a study on, ―Role of Clearing & Forwarding Agents in Business‖.
She explained the nature and role of the Clearing and Forwarding Agents in detail and the
Documentation process is perfectly done by them. She concluded topic by providing the Quality
Services to the International Traders.
According to Gourdin (2006) mentioned that from the shipper‘s point of view, forwarders are
engaged in mode and carrier selection, documentation, payment, etc.
According to Sabareeswaran (2007) conducted a study on, ―Working of Freight Forwarders‖.

In that he explained the nature, duties and functions of the freight forwarders. They are also called as
Mr.5 % because the freight forwarders usually getting the commission only 5 % on the shipment of
cargo. Finally he concluded the freight forwarders contribution to logistics business is quite a vital
role. Now the modern business cannot function comfortably without the assistance from the freight
forwarders.
According to Yael Perlman , Tzvi Raz and Livnat Moshka( 2009) Studies identifying the key
factors which are important for IFF clients in freight service selection, international or otherwise, vary
since there are many different types of carriers, including: customhouse brokers (CHBs); non-vessel
operating carriers (NVOCCs); and export management companies which characterize themselves as
third-party logistics providers (TPLs), i.e., external companies performing functions traditionally
conducted in-house . In the face of the proliferation of different types of carriers, previous distinctions
seem increasingly blurred the more that added responsibilities are taken on .
According to Paul Sundar Kirubakaran Vol 1, No 8 (2012), the goods are moved from the
manufacturers to the customers/consumers by the freight forwarders with their effective utilization of
the road/sea/air transportations. The key concept in freight forwarding is the delivery of the cargo till
the destination point or at the doorsteps of the consignee. Most of the manufacturers are rely on
international freight forwarders to perform the operations to bring the goods to their end users. The
international freight forwarders act as bridge between the manufacturers/exporters to the destination
of the consumers.
According to jin-long lu (2013) this study on investigating critical factors that influence
shippers‘ and international freight forwarders‘ preferences in carrier selection adopts an integrated
hierarchical information integration approach to collect the preference data from taiwanese shippers
and international freight forwarders of ocean carriers. in total, data from 345 shippers and 245 freight
forwarders were included in the sample for analysis. the study then uses multiple linear regression
models to investigate the critical factors that influence the preferences in carrier selection among
shippers and iffs.
According to alex lennane, (2014) posted in the load star, freight forwarders are urging the
new government in India to improve the country‘s logistics infrastructure as soon as possible. calling
on all stakeholders to help the government with what will be ―a massive task‖, bharat thakkar,
immediate past president of the air cargo agents‘ association of India, said public-private partnerships
(ppps) would be the best way to achieve results quickly.
OBJECTIVES OF THE STUDY

 To know about the opinion of customers on freight rates provided by the freight forwarder
 To identify the customer‘s satisfaction towards freight forwarders
 To identify the major problem that their customers experience with their service providers.
 To suggest ways to improve the services of freight forwarders
 To identify the future expectations of the customers from the service providers.
DEMOGRAPHIC PROFILE
SIMPLE PERCENTAGE ANALYSIS
PARTICULARS VARIABLES RESPONDENTS PERCENTAGE
TYPE OF BUSINESS Exporter 22 44%
Both exporter and 28 56%
Importer
SIZE OF THE Small scale 20 40%
ORGANISATION Medium scale 18 36%
Large scale 12 24%
EXPERIENCE AS AN Up to 5 years 8 16%
EXPORTER OR IMPORTER 5-10 years 10 20%
Above 10 years 32 64%
TYPE OF GOODS Engineering goods 3 6%

WHICH THEY DEAL WITH Textiles 35 70%
Agricultural goods 8 16%
Others 4 8%
HOW FREQUENTLY THEY Daily 10 20%
EXPORT THEIR GOODS
Weekly 15 30%
Fortnightly 6 12%
Monthly 19 38%
THE USE OF MULTI Yes 34 68%
LOGISTICS SERVICE No 16 32%
PROVIDER
THE MAJOR FACTOR Freight rate 21 42%
CONSIDERED WHILE Transmit time 7 14%
CHOOSING A FREIGHT Safety 6 12%
FORWARDER Service 9 18%
Goodwill 7 14%
THE SERVICES PROVIDED Bonded warehouse 9 18%
BY THEIR SERVICE Custom clearance 13 26%
PROVIDER Stuffing/destuffing 7 14%
Freight forwarding 11 22%
Documentation 10 20%
THE TYPE OF FREIGHT Door to door 8 16%
FORWARDING SERVICE Door to port 13 26%
THEY AVAIL Port to port 17 34%
Port to door 12 24%
MODES OF TRANSPORT IN Air 6 12%
THEIR INTERNATIONAL
TRADE Sea 44 88%
SEAPORT WHICH THEY Cochin 12 24%
USE Chennai 13 26%
Tuticorin 19 38%
Mumbai 5 10%
STUFFING FACILITY House stuffing 11 22%
PROVIDED BY THEIR ICD stuffing 21 42%
FREIGHT FORWARDER CFS stuffing 18 36%
WAREHOUSE FACILITY Yes 19 38%
PROVIDED BY THEIR
No 31 62%
SERVICE PROVIDER
HOW THE EXPORTERS Very good 8 16%
FEEL ABOUT THE Good 9 18%
WAREHOUSE FACILITY Average 14 28%
RENDERED BY THEIR Poor 13 26%
SERVICE PROVIDER Very poor 6 12%
THEIR OPINION ON THE Very high 7 14%
FREIGHT RATES PROVIDED High 19 38%
BY THEIR SERVICE Normal 15 30%
PROVIDER Less 5 10%
Very less 4 8%
KIND OF TRANSPORT Light vehicles 11 22%
FACILITY THAT THEY USE Heavy vehicles 22 44%
INSIDE INDIA Very heavy vehicles 9 18%
Others 8 16%
WHETHER THEY ARE Yes 39 78%
SATISFIED WITH THE No 11 22%
TRANSPORT FACILITY
SERVICE PROVIDER WILL Yes 41 82%
INFORM ABOUT CURRENT
No 9 18%
STATUS
HOW SATISFIED THE Highly satisfied 17 18%
EXPORTERS ARE WITH Satisfied 11 34%
THEIR UPDATING Neutral 6 22%
Least satisfied 5 12%
Not satisfied 7 10%
LEVEL OF SATISFACTION Highly satisfied 13 14%
ABOUT THE SERVICE Satisfied 19 26%
RENDERED BY THEIR Neutral 7 38%
SERVICE PROVIDER Least satisfied 4 14%
Not satisfied 6 8%
MAJOR PROBLEM THE Documentation 4 12%
EXPORTERS FACE WITH Transport 18 8%
THE SERVICE PROVIDER Cost 5 36%
Safety 9 10%
Infrastructure 7 18%
Packaging 14%
DEMOGRAPHIC PROFILE OF THE RESPONDENT
56% of the respondents are both exporting and importing goods. 40% of the respondents
belong to small scale industry. 64% of respondents have above 10 years of experience as an exporter
or importer. 70% of the respondents deal with the textile products. 38% of the respondents export
their products every month to their customers. 68% of the respondents make use of the multi logistics
service providers. 42% of the respondents consider freight rate is the major factor while they choose a
freight forwarder. 26% respondent‘s service provider helps the exporters in clearing custom duties.
34% of the respondents prefer port to port freight forwarding services. 88% of the respondents use sea
transportation for most of the international trade. 38% of the respondents use Tuticorin port as the
major seaport for transporting their goods from one place to another. 42% of the respondent‘s service
provider provides ICD stuffing for their freight forwarding. 62% of the respondent‘s service provider
provides warehouse facility to their customers for storage purpose. 28% of the respondents rated that
their service provider provides average warehouse facility to them. 38% of the respondents charges
high freight rates from their customer. 44% of the respondents use heavy vehicle for transporting their
goods inside India. 78% of the respondents were satisfied with the transportation facility rendered by
their service provider. 82% of the respondent‘s service provider informs their customer about the
current status of the goods. 34% of the respondents are satisfied with their updating facility provided
by their service provider. 38% of the respondents are satisfied with the overall facilities and the
services rendered by their service providers. 36% of the respondent‘s major problem which they face
with their service provider is cost.
WEIGHTED AVERAGE ANALYSIS
HOW THE EXPORTERS FEEL ABOUT THE CHARGES LEVIED BY THEIR SERVICE
PROVIDER
FACTORS LOW MEDIUM HIGH TOTAL TSC WEIGHTED

AVERAGE
SCALE 1 2 3 6
Transportation 6 15 29 50 123 20.5
CHA charges 15 23 12 50 97 16.1
ICD charges 17 21 12 50 95 15.8
Ocean freight 10 13 27 50 117 19.5
Warehousing 9 24 17 50 108 18
Stuffing/destuffing 11 26 13 50 102 17
Interpretation: According to the weighted average analysis the charges levied for transportation is
very high and it ranks first (20.5).
SATISFACTION LEVEL OF SERVICE RENDERED BY THEIR FREIGHT FORWARDER
FACTORS H.S S N L.S N.S TOTAL TSC WEIGHTED

AVERAGE
Scale 5 4 3 2 1 15
Documentation 7 23 15 2 3 50 159 10.6
Packaging 5 22 14 7 2 50 171 11.4
Insurance 17 14 15 4 - 50 194 12.9
Freight rate 4 11 18 3 4 50 148 9.8
Safety 6 16 20 8 - 50 170 11.3
Prompt service 5 13 22 7 3 50 160 10.6
Interpretation: The average score of (12.9) respondents stated insurance ranks first in the level of
satisfaction that the service rendered by their freight forwarders.
GARRETT RANKING METHOD

THE FACTORS YOU LOOK WHEN YOU AVAIL A SERVICE
FACTORS I II III IV V VI VII VIII IX X TOTAL

Cost control 17 12 10 5 3 2 - 1 - - 50
Timely delivery 5 14 10 8 7 3 2 - 1 - 50
Consistency 2 3 1 6 7 12 5 4 2 8 50
Material 2 - - - 5 5 9 3 10 16 50
handling
Uniqueness 6 1 7 11 12 5 2 4 1 1 50
packaging - 1 1 3 6 5 15 11 4 4 50
Promptness - 1 - 1 2 6 11 14 11 4 50
Safety 2 6 16 4 5 8 2 1 - 6 50
Transportation 1 3 - 2 3 1 8 4 17 11 50
Insurance 6 7 8 12 7 5 1 3 - 1 50
SI.NO 100(Rij-0.5)/Nj CUMULATIVE VALUE GARRETT VALUE
1 100(1-0.5)/10 5 82
2 100(2-0.5)/10 15 71
3 100(3-0.5)/10 25 64
4 100(4-0.5)/10 35 58
5 100(5-0.5)/10 45 53
6 100(6-0.5)/10 55 48
7 100(7-0.5)/10 65 43
8 100(8-0.5)/10 75 37
9 100(9-0.5)/10 85 30
10 100(10-0.5)/10 95 19
FACTORS I II III IV V VI VII VIII IX X TOTAL

Cost control 1394 852 640 290 159 96 - 8 - - 5239
Timely 410 1207 640 464 371 144 86 - 30 - 3352
delivery
Consistency 164 222 64 348 371 576 215 148 60 152 2320
Material 164 - - - 265 240 387 111 300 304 1771
handling
Uniqueness 492 71 448 638 636 240 86 148 30 19 2808
Packaging - 71 64 174 318 240 645 407 120 76 2115
Promptness - 71 - 58 106 288 473 580 330 76 1920
Safety 164 426 1024 232 265 384 86 37 - 114 2732
transportation 82 213 - 116 159 48 344 148 510 209 1829
Insurance 492 497 512 696 371 240 43 111 - 19 2981
SI.NO FACTORS GARRETT VALUE AVERAGE SCORE RANK

1 Cost control 5239 105 I
2 Timely delivery 3352 67 II
3 Consistency 2320 46 VI
4 Material handling 1771 35 X
5 Uniqueness 2808 56 IV
6 packaging 2115 42 VII
7 Promptness 1920 38 VIII
8 Safety 2732 55 V
9 transportation 1829 37 IX
10 Insurance 2981 60 III
Interpretation: The first and foremost factor that the exporters look from their service provider is cost
control.
SUGGESTIONS
 Majority of the respondents are satisfied with their freight forwarder and hence it is suggested
to maintain high customer care and to offer excellent services to retain the existing customer
base.
 Many customers usually bear a huge freight rates for their shipments, the freight forwarders
can provide suggestions to minimize the freight rates by using efficient mode of
transportation and proper care should be taken to reduce the cost.
 The freight forwarders can improve themselves by providing various new facilities for the
customers for completing their shipments in proper way.
 The government rules and regulations have to be liberalised, so that trading can be done
easily. The customers can be informed about the new policies and regulations provided by the
government for effective trade.
 The freight forwarder can give more importance to the transportation facilities. By improving
the facilities and adopting modern techniques help the freight forwarders to create a better
business environment.
 With the development of technology and electronic data interface, the delaying process of
documentation can be solved.
 A good warehouse facility can be provided for the customers with the proper infrastructure
and storage facility so that the customers finds useful to store their goods.
CONCLUSION
The logistics service providers which takes a major part in the development of international
trade, should improve the quality of service in the areas such as quick processing, prompt
communication and flexibility in serving the customer‘s needs to the maximum extend. This could
however improve the industries efficiency to compete with the world class quality of service.
The service providers are increasing rapidly numbers, which has lead the service industry
highly competitive, wherein customers demands and choices increases rapidly and therefore the
service providers are supposed to provide a god quality services and competitive structure. From this
study on the exporter‘s satisfaction towards the freight forwarders it is concluded that the freight rates
provided by the freight forwarders are very high, they can take proper steps to minimise the cost and
provide a good service. Most of the respondents are satisfied by the services, and these freight
forwarders should take some initiative to sustain their valuable customers. The main factors which the
exporters always look forward from their service provider are proper warehousing with good
infrastructure, material handling, packaging, custom clearance and documentation. The exporter can
give some more attention to these factors so that they can create goodwill in the mindset of the
customers in the competitive business environment.
BIBLIOGRAPHY
BOOKS AND JOURNALS
 Kothari.C.R. Research Methodology (2004) - Methods & Techniques, New Delhi, New Age
International (P) Ltd., publishers, second edition.
 Yael Perlman*, Tzvi Raz and Livnat Moshka, ―key factors in selecting international freight
forwarder‖, The Open Transportation Journal, 2009, 3, 29-34.
 K.Bagyalakshmi, R.Karthika, ―A study on the influencing factors for exporters in choice of
selecting the freight forwarders‖, International Journal of Multidisciplinary Research and
Development, Volume:2, Issue:4, 198-200 April 2015
 Paul Sundar Kirubakaran Vol 1, No 8 (2012), Freight Forwarders Hurdles In The Operations
– An Exploratory Study With Special Reference To Tamil Nadu – India, The International
Journal Research Publication‘s, Research Journal of Commerce and Behavioural Science.
 D‘este, G. M., and Meyrick, S. (1992). Freight forwarder Selection in a export process
Conceptual Framework for the Decision Process. Maritime Policy and Management, Vol.19,
No.2, pp.127-138.
 Alex Lennane, 07.03.2014, Posted in The Load Star, Freight forwarders say new government
must act fast to improve India‘s Logistics.
 Lambert, D., and Stock, J. (1993). Strategic Logistics Management. McGraw-Hill
Companies, Inc.: USA.
 Matear, S., and Gray, R. (1993). Factors Influencing Freight Service Choice for Shippers and
Freight Suppliers. International Journal of Physical Distribution and Logistics Management,
Vol.23, No. 2, pp. 25-36.
 Jin-Long Lu, investigating critical factors that influence shippers‘ and international freight
forwarders‘ preferences in carrier selection using integrated hierarchical information
integration approach, Journal of Marine Science and Technology, Vol. 21, No. 2, pp. 182-190
(2013)
 Freight forwarder role in export transactions by Michael ford.pdf
ONLINE RESOURCES
 How to choose a freight forwarder, (―n.d‖).container transportation. Retrieved from
www.container-transportation.com
 Responsibilities of freight forwarder,(―June 19, 2004‖).trade India. Retrieved from
www.tradeindia.com/2014/06/responsibilities-of-freight-forwarder
 Laura Reynolds (―n.d), How does a freight forwarding company work. ehow. Retrieved from
www.ehow.com/how-does-467560/freight-forwarding-company-work

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INTERCONTINENTAL JOURNAL OF MARKETING RESEARCH REVIEW

ISSN:2321-0346 - ONLINE ISSN:2347-1670 - PRINT -IMPACT FACTOR :1.590

A STUDY ON EXPORTERS SATISFACTION TOWARDS FREIGHT

According to Sabareeswaran (2007) conducted a study on, ―Working of Freight Forwarders‖.

OBJECTIVES OF THE STUDY

TYPE OF GOODS Engineering goods 3 6%

DEMOGRAPHIC PROFILE OF THE RESPONDENT

FACTORS LOW MEDIUM HIGH TOTAL TSC WEIGHTED

SATISFACTION LEVEL OF SERVICE RENDERED BY THEIR FREIGHT FORWARDER

FACTORS H.S S N L.S N.S TOTAL TSC WEIGHTED

GARRETT RANKING METHOD

FACTORS I II III IV V VI VII VIII IX X TOTAL

FACTORS I II III IV V VI VII VIII IX X TOTAL

SI.NO FACTORS GARRETT VALUE AVERAGE SCORE RANK

BOOKS AND JOURNALS

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