Empirical Taxonomy

Maritime Economics & Logistics, 2004, 6, (199–219) r 2004 Palgrave Macmillan Ltd All rights reserved. 1479-2931/04 $30.00 www.palgrave-journals.com/mel

An Empirical Taxonomy for Logistics Service Providers

K E E - H U N G L A I 1 , TC E D W I N C H E N G 1 & A N DY C L Y E U N G 1

1 D e p a r t m e n t o f L o g i s t i c s , T h e H o n g K o n g P o l y t e c h n i c U n i v e r s i t y, Hung Hom, Kowloon, Hong Kong. E-mail: lgtmlai@polyu.edu.hk, lgtcheng@polyu.edu.hk, lgtandyy@polyu.edu.hk

The paper investigates the existence of different types of logistics service providers (LSPs) and the relationship of type with service performance. A cluster analysis of survey data from 221 LSPs resulted in the identification of four types of LSPs. A taxonomy was developed that reveals that LSPs are at various stages of development in terms of service capability. The taxonomy highlights the service strategies of different LSP types and their performance implications. In addition, the taxonomy provides insights into the characteristics of different types of LSPs, which underpin different market segments of the logistics service business. Discussions of the use of the taxonomy, to improve LSP service capability and performance, are provided. Maritime Economics & Logistics (2004) 6, 199–219. doi:10.1057/palgrave.mel.9100109

Keywords: Logistics services; capability; performance; cluster analysis; market segments.

INTRODUCTION Logistics has developed into an integral part of the corporate strategy of many firms, contributing to the primary activities of their value chain (which span inbound logistics; operations; outbound logistics; marketing and sales; and services), and ultimately creating cost and service advantages to the firm (Porter, 1985). On the other hand, many manufacturers and retailers nowadays have adopted a supply chain management (SCM) approach, increasingly outsourcing their logistics activities to logistics service providers (LSPs). Generally, an...