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Key Factors in Selecting an International Freight Forwarding Company
Abstract
Due to globalization, the number of companies operating overseas is constantly expanding along with the organizations offering the capability to deal with the complexities inherent in international trade. Since international freight forwarders (IFF) are considered the main logistic mediator in international trade, selecting an IFF is a significant element in a company's success overseas.
This paper examines key considerations among Israeli business executives when selecting an IFF. The conceptual model that was developed describes the relationship between the characteristics of the business environment in which IFF clients operate and the factors affecting the choice of an IFF. Three factors were used to define the client's business environment -company size, number of destinations, and the scope of use of IFF services. Two characteristics described respondents - seniority and training. After a detailed study of the literature and discussion with long-time IFF users, the authors identified 18 factors in selecting an IFF. These factors were analyzed and then organized in groups in regard to reliability, IFF business environment, information management, service and prices.
The Reliability group was found to be the most important for IFF clients. It was followed by the Service and Prices group. The group of least importance is Information Management.
Data for this study was collected using a questionnaire administered to some 200 organizations. The return rate was about 25%. The questionnaire's reliability (Cronbach's α) is 0.829, consistent with the fact that only 6% of the respondents suggested further reasons for choosing forwarding companies beyond those suggested.
