E-TRANSFORMATION IN PORT MANAGEMENT:
AN EMPIRICAL INVESTIGATION#
LEE, Sang-Yoon
Associate Professor, Graduate School of Logistics, Inha University,
253 Yonghyun-dong, Nam-Gu, Incheon, 402-751, Korea;
Email: sylee@inha.ac.kr; Phone: +8232 860 8236 ; Fax: +8232 860 8226
TONGZON, Jose L*1
Professor, Graduate School of Logistics, Inha University,
253 Yonghyun-dong, Nam-Gu, Incheon, 402-751, Korea;
Email: jtongzon@inha.ac.kr; Phone: +8232 860 8234; Fax: +8232 860 8226
KIM, Yonghee
Specialist, SCM/Global Logistics, CJ Cheiljedang
292 Ssangrim-dong, Jung-Gu, Seoul, 100-400, Korea;
Email : dragon2@cj.net; Phone: +8210 6295 3259; Fax: +822 6740 3919
Abstract
E-transformation in container ports means a comprehensive improvement in information
system, which effectively meets customers’ requirements and needs by timely providing
them with useful terminal management information. There is a considerable theoretical
literature on the impact of e-transformation on business performance but there is very
little empirical study on its impact on ports. The main objective of this paper is to
empirically investigate how e-transformation in container port management can influence
customer satisfaction and port competitiveness. The findings reveal that e-Transformation
in container ports can affect customer satisfaction and port competitiveness through eWorkplace, customer relationship management and security, implying that container ports
should make every effort to focus e-transformation in these critical areas. Due to limited
empirical studies in this area, the findings have provided an empirical support for the
importance of e-transformation in container terminal management and shed more light on
how e-transformation can affect customer satisfaction and port competitiveness.
Key words: e-transformation, port management, supply chain orientation, structural
equation model (SEM), port competitiveness.
* Corresponding author; # Paper to be presented at the Second Annual International Workshop on Port
Economics and Policy, 10-11 December 2012, Singapore.
1
E-TRANSFORMATION IN PORT MANAGEMENT:
AN EMPIRICAL INVESTIGATION
1. INTRODUCTION
There have been considerable changes in 21C’s container terminals with the rapid
development of the internet. The introduction of location tracking technology or gate
automation in the terminal and automated equipment system at the yard has resulted from
the development of the internet based information communication technology. The
improvement of port management technology with the internet suggests various business
models such as B2B (Business to Business), B2C (Business to Consumer) and C2C
(Consumer to Consumer). In particular, port management information, EDI transmission
and the custom clearance process are served with the internet, and port management
endeavors to raise customer satisfaction by providing information on schedules, live
video clips and SMS text messages on expected cargo work time and other value-added
services. Further, terminals attempt to intensify their own competitiveness vis-à-vis other
terminals by providing a highly advanced port management information service as a part
of a differentiated strategy.
In this light, the objective of this study is to empirically investigate how eTransformation of container port management can affect customer satisfaction and port
competitiveness. The current study applies the concept of e-Transformation used in the
existing information communication area to container terminal management. By
analyzing the relationships among e-Transformation, customer satisfaction and port
competitiveness, some strategic implications for port management can be drawn.
This study is organized as follows. Section 2 reviews the relevant literature;
section 3 presents the theoretical framework; section 4 describes the methodology used
and section 5 presents the empirical findings followed by a conclusion and strategic
implications.
2. RELEVANT LITERATURE REVIEW
E-transformation can be defined as a transformation of some operational processes caused
by advanced information technology. Leem et al. (2003) have defined that etransformation are enterprise-wide changes and e-work-related innovation processes
through information technology and the internet. In practical terms, e-transformation is
adopted by enterprises or research institutes to promote e-business, as shown in Table 1,
in various ways.
2
Table 1: Various definitions of e-Transformation
Organization
GE
Accenture
PWC
SAP
Definition
Construction of a new business process from traditional enterprise process to
fit for new e-Business environment.
Establishment of enterprise model at on-line by collaboration of valued
chain and ability reinforcement of customer intimacy at off-line business.
Establishment of a business strategy for e-Business from dimension of new
organized structure, custom administration and business re-plan.
In order to accomplish communication from market smoothly, change the
business model by organizations and total value chain integrations of
enterprise within/external between process optimization.
Aurther D.
Re-planning from beginning of the value chain to end using e-Business.
Little
Science &
Development of company activities from off-line with on-line rapidly on
Technology Policy
relationship with customers, and construction between enterprises from web.
Institute
The benefits of e-transformation in terms of its impact on performance have been the
subject in several studies not only in the field of transport and logistics but also in other
areas of business.
In the field of logistics, Evangelista and Sweeny (2006) identified three trends
in the application of ICT in the transport and logistics service industry: (i) the integr
ation of traditional services (transportation and warehousing) with information-based s
ervices (e.g. tracking and tracing (T&T), booking, freight rate computation, routing a
nd scheduling), (ii) transport and logistics service providers taking a new role in the
supply chain as infomediaries or online freight e-market places, and (iii) the emergen
ce of a new category of logistics service providers called fourth party logistics (4PLs
). Porterfield et al. (2010) observed a positive relationship between electronic information
exchange and firm performance using econometric analysis of firm-level data. Sanders
(2007), using structural equation modeling based on survey data of first-tier suppliers to
firms in the electronic industry, found a positive and significant impact of e-business on
supplier performance. Tan et al. (2010), using the same methodology, showed the impact
on firm performance caused by three constructs, i.e. electronic data interchange (EDI)
capacity, information alignment and relational alignment. For more details of these
studies, see Nguyen and Tongzon (2012).
This concept and its impact has not however been empirically and systematically
investigated in the context of port management. The concept of e-transformation can be
applied to container terminal management and operations. Container terminals that
introduce e-transformation may achieve certain strategic aims. From the Business to
Business (B2B) viewpoint, an effective container terminal information system makes it
3
possible to obtain transaction cost savings and a two-way information flow by automation
of work through EDI or Extranet at the shipping company and forwarder, cargo owner or
customs and port station level. From the Business to Consumer (B2C) viewpoint, it makes
it possible to undergo an on-line process of work through the Intranet as well as to have a
customer-oriented management system with information sharing between departments,
rapid response to customers’ requests and a horizontally organized enterprise
management. From the perspective of Consumer to Consumer (C2C), it makes it possible
to diversify sales channels between customers and cargo owners, intensify customers’
loyalty and provide a rapid service while it endeavors to improve the relationship with
customers through diverse information on web sites. For example, the Port of Singapore
(PSA) has been transformed into a documentary free port with the assistance of etransformation of its port functions.
In the context of container terminal management, Jung (2005) suggests that
ports should transform their information systems into e-transformation systems by
adopting state-of-the-art technologies such as SCO, CRM, ERP for all port facilities in
order to improve management efficiency in this digital economic environment.
3. THEORETICAL FRAMEWORK
Shipping lines select their ports of call based on cost and time factors, and container
terminals endeavor to reduce any possibility of exclusion from customers’ service routes.
The increased utilization of information system is one of the efforts of container terminals
to attract and maintain customer loyalty. The current paper mainly focuses on the
influence of e-transformation of container ports on customer satisfaction and port
competitiveness.
We postulate that e-Workplace (eW), customer relationship management (CRM),
and security (SEC) are the main factors that constitute port e-Transformation. The current
study employs seven measurements for e-Workplace encompassing the essential
requirements such as berthing and departure information to innovative items such as
custom clearance, X-ray and CIC inspection-related information, as can be seen from
Table 2. The construct and measures used are consistent with Bailey and Pearson (1983),
Lindroos (1997), Liu and Arnett (2000), and Barnes and Vidgen (2001) which have
analyzed the critical information factors provided in the website affecting user satisfaction
and pointed out the importance of effective provision of fundamental information. These
seven measures for e-workplace are designed to focus on customer convenience and
satisfaction to obtain vital information from e-transformation.
4
Table 2: Construct and Observation variables in e-Workplace
Construct
Observation variable (indicator)
eW
(e-Workplace)
eW1: Terminal information system provides berthing/departure information
accurately.
eW2: Terminal information system provides loading/unloading information
accurately.
eW3: Customers can inquire expense and bill information through terminal
information system.
eW4: Customers can inquire latency time from CY pick-up to gate out
through terminal information system.
eW5: Customers can inquire next schedule plan through web-site in the case
of port closing.
eW6: Customers can inquire custom clearance information through web-site.
eW7: Customers can inquire X-ray, CIC inspection information through
web-site.
Source: Adopted from Bailey and Pearson (1983), Lindroos (1997), Liu and Arnett (2000), and Barnes and
Vidgen (2001)
Due to intense competition between terminals and diverse customer demands,
terminals have come to be interested in relationship management. Customer relationship
management could include such aspects as partnership, sales process, business strategy,
organization structure, and the like (Lambert et al., 1999; Liu and Arnett, 2000; and Helo
and Szekely, 2005). Four items are employed to measure customer relationship
management from the practical viewpoint. Table 3 shows the variables used to measure
the customer relationship management in practice (CRMP).
Table 3: Construct and Observation variables in CRMP
Construct
Observation variable (indicator)
CRMP
(Customer
Relationship
Management in
Practice)
CRMP1: Terminal information sites are properly designed and categorized.
CRMP2: Complicated problems and claims can be handled effectively
through terminal information system.
CRMP3: EDI transmission errors can be effectively solved within the
information system.
CRMP4: Customers can easily access port operation information through
notice board.
Source: Adopted from Lambert et al. (1999), Liu and Arnett (2000), and Helo and Szekely (2005)
Finally, it is postulated that the security of a container terminal is closely related
with e-Transformation in the sense that it involves the safety of personal information,
contains necessary information on sales of shipping companies, terminal network or
password, protocol and server, and others while using the information system in terms of
risk management. The International Maritime Organization (IMO) has enacted the
5
International Code for the Security of Ships and of Port Facilities (ISPS Code) for
management of dangerous products that are loaded in containers. On the other hand, the
security for information system has also been intensified, which implies that all port
information is securely maintained and not to be released or lost by an external attack or
infringement. For this reason, studies on the use of RFID or e-Seal, Real Time Location
System (RTLS) have actively been progressing. It is believed that the security of a
container terminal is closely related with e-transformation in the sense that it involves the
safety of personal information, contains necessary information for sales of shipping
company, terminal network or password, protocol and server and others, while using the
information system in terms of risk management. Consistent with Blakley et al. (2001),
Abkowitz (2003), and Shin (2005), we have provided six indicators to measure security at
terminals, as shown in Table 4.
Table 4: Construct and Observation variables in Security
Construct
Observation variable (indicator)
SEC1: Terminal information system secures EDI information protecting
others’ inspection.
SEC2: Terminal information system carefully preserves private information.
SEC
SEC3: Terminal information system confirms ISPS regulations.
(Security)
SEC4: Terminal information system follows safety regulations.
SEC5: Terminal information system adopts an effective fire-wall security.
SEC6: Terminal information system effectively responds to external attacks.
Source: Adopted from Blakley et al. (2001), Abkowitz (2003), and Shin (2005)
The impact of maritime security improvements on the efficiency of operations is
one economic issue of most concern to maritime transport service providers. But there is
still a great deal of controversy over the impact of maritime security initiatives on
efficiency, service quality and competiveness of maritime transport providers. The
relevant literature is mostly focused on the negative impacts of maritime security on
operational efficiency of supply chains, especially on JIT practices. It is argued that if
maritime security is not appropriately and effectively managed (for example, inspection
of every container is conducted), the efficiency of operations and management of supply
chain may deteriorate (Thai, 2007; Wolfe, 2002). The efficiency of an integrated supply
chain may be put at some risk because it is no longer prudent to optimize operations so
completely around cost minimization. By using mathematical modeling to minimize the
number of inspection and transshipment container moves, White (2003) found that the list
of container inspections is important to port efficiency because the ship’s departure time
is highly variable if this list is submitted after the ship has docked.
On the other hand, there is much room for efficiency improvements for transport
6
service providers, especially when their level of IT and EDI utilization is limited.
Investment in IT and other technological solutions accompanied by improvements in
operational processes and procedures in line with the security requirements would lead to
more transparency and visibility in transactions, increased speed of service performance,
reliability of service performance and documentation processes and thus, enhance the
efficiency and quality of their operations and management. Further, they can enhance
efficient information exchange at the ship/port interface and among partners in the
integrated supply chain. Abbot (2002) found that enhanced security efforts could actually
enhance the efficiency of container terminals because the training of employees in
security-related issues should help move non-threatening boxes faster while better
pinpointing those containers that require greater scrutiny. Thai (2007) has also concluded
that improvements in maritime security have actually resulted in greater efficiency in the
operation and management of maritime transport services in Vietnam.
Table 5: Summary of Hypotheses
Hypothesis 1
E-Transformation consists of eWorkplace, CRM and security.
Hypothesis 2
E-Transformation has a positive influence on customer satisfaction and port
competitiveness.
Hypothesis 3
Customer satisfaction has a positive influence on port competitiveness
Source : Authors
As shown in Table 5, three hypotheses are established to be empirically tested.
Hypothesis 1 is designed to show the components of e-transformation, and hypotheses 2
and 3 try to investigate the influence of e-transformation on customer satisfaction and port
competitiveness, and the relationship between customer satisfaction and port
competitiveness.
The present research adopts several indices to measure customer satisfaction and
competitiveness in the context of container port management. Customer satisfaction is a
major issue of interest in marketing. Studies on customer satisfaction are mainly focused
on reuse, oral transmission effects and conversion behaviors. These studies have shown
that customer satisfaction directly affects customer loyalty (Heskett et al., 1994; Zins,
2001; Flavian et al., 2006). The current paper employs five measures to capture the
degree of satisfaction of shipping lines with their container terminals, as listed in Table 6.
7
Table 6: Construct and observation variables in customer satisfaction
Construct
Observation variable (indicator)
CS
(Customer
Satisfaction)
CS1: Ports/terminals’ physical distribution service meets our expectation.
CS2: Ports/terminals’ cargo handling charge is cheaper than others.
CS3: Ports/terminals’ handling speed is quicker than others.
CS4: Even if price is somewhat expensive, we (liners) will continuously use
our current terminal.
CS5: We intend to recommend container terminals we are using to other
customers.
Source: Adopted from Willingale (1982), Oliver (1999), Zins (2001), Tongzon (2001), Flavian et al. (2006),
Yeo and Song (2006), and Chang et al. (2008)
Meanwhile, most previous work on port choice and competitiveness has
employed some common factors directly related with port physical conditions and
operational activities such as port location, infrastructure, superstructure, productivity,
service quality, cost, marketing and hinterland accessibility (Willingale, 1982; Brudg and
Daley, 1986; Tongzon, 2001; Mason, 2003; Yeo and Song 2006; and Chang et al., 2008).
However, some important strategic management studies have identified some critical
performance dimensions capable of providing a firm with a competitive advantage. For
instance, Hayes et al. (1988) have proposed cost, quality, dependability, flexibility and
innovation as the critical components providing the firm a competitive edge. Scannell et
al. (2000) have noted that effective supply chain management may positively affect cost,
quality, flexibility, and innovation performance. In addition, Porter (1997) has suggested
that the only way to have a competitive advantage is through innovation and improvement,
involving a consistent strategic visional direction. The current study adopts six
competitiveness components reflecting cost, quality, responsiveness, flexibility,
innovation aspects, and market share as shown in Table 7.
Table 7: Construct and Observation variables in Port Competitiveness
Construct
Observation variable (indicator)
PC1: The terminal contributes to save our company’s logistics costs.
PC2: The terminal contributes to improve our company’s overall logistical
service quality.
PC3: Ports/terminals respond quickly to customers’ requests and needs.
PC
PC4: The terminal flexibly responds to the environmental changes and
(Port
Competitiveness) unanticipated events.
PC5: The terminal continuously adopts an innovative technology and
process.
PC6: Market shares of terminals we are using have increased.
Source: Adopted from Hayes et al. (1988) and Scannell et al. (2000).
8
4. RESEARCH METHODOLOGY
All data for this study were collected by survey questionnaire. First, a survey instrument
was developed based on the previous literature, which consists of 7 questions for eworkplace, 4 questions for CRMP, 6 questions for security, and 11questions for customer
satisfaction and port competitiveness. Second, a pilot test was conducted to see if any
important variables were excluded. Third, based on the pilot test results, a final
questionnaire was established. Fourth, after collecting the survey data, authors confirmed
the appropriateness of factors through confirmatory factor analysis (CFA). Finally, a
structured equation model was developed to establish any causal relationship between etransformation and port performance.
A total of 200 questionnaires were distributed and the potential respondents were
asked to evaluate their most frequently called container terminal in Korea and other
countries, respectively, using 7-point Likert scale, in which point 1 means “strongly
disagree” and point 7 means “strongly agree”. A total of 102 valid questionnaires were
collected from 21 shipping lines including Korean shipping companies (Hyundai
Merchant Marine, Hanjin Shipping, Korea Marine Transport, Han-seong Line, CK Line,
Dong-young Shipping, Sinokor, Nam-sung Shipping, Doowoo Shipping, MECI Shipping,
Pos-i, Korea Express, Great Shipping, Han-il Shipping), and other major foreign shipping
companies (MOL, WANHAI LINE, YANGMING, COSCON, APL and ZIM LINE).
Among them, eight shipping lines are ranked in top 20 worldwide. The most frequently
used domestic container terminals are Busan New Port container terminal, Hutchison
Korea terminal, Pusan East Container terminal, Incheon container terminal, Incheon Sunkwang container terminal, Ulsan Jeong-il container terminal in Korea and ports in other
nations, Shanghai container terminal in China, HIT in Hong Kong, PSA in Singapore,
HHLA in Germany, ECT in Netherlands, Long beach container terminal in the U.S.A. As
indicated in Table 8, the respondents are supposed to be experienced employees and have
sufficient knowledge about container terminal management and operation, and are
employing a terminal information system.
Table 8: Descriptive Information of Respondents
Year
<3
4~6
7~9
10~12
13~15
16~18
>19
Sum
9
Work experience in the industry
Population
Cumulative
7.1%
7.1%
30.4%
37.5%
17.9%
55.4%
21.4%
76.8%
17.9%
94.6%
1.8%
96.4%
3.6%
100.0%
100.0%
Work experience in the company
Year
Population
Cumulative
<3
21.4%
21.4%
4~6
37.5%
58.9%
7~9
17.9%
76.8%
10~12
12.5%
89.3%
13~15
5.4%
98.2%
16~18
3.6%
98.2%
>19
1.8%
100.0%
Sum
100.0%
5. EMPIRICAL FINDINGS
5.1 DESCRIPTIVE ANALYSIS
In terms of e-Workplace, the item of custom clearance service (eW6) shows the highest
average of 4.77 but two items show less than point 4. In particular, the information
service for expense and bill (eW3) register the lowest values, implying the lack of related
information services, while the shipping companies consider the information for customs
clearance and costs as important factors. The practical customer relationship management
in the target terminals is evaluated as above average in general except for CRMP4, but the
security management is recognized unsatisfactory in all measures. In terms of customer
satisfaction and port competitiveness, it shows an average of almost point 4 for all items
except for CS1, CS3 and CS4. Items on saving port user’s logistics costs (PC1) get the
highest valuation (point 4.33); in contrast, continuous utilization of current terminals
under the higher price gets the lowest (point 3.82). See Table 9 for more details.
Table 9: Descriptive findings for the e-transformation
Response Scales (%)
Items
eW
CRMP
SEC
CS
PC
10
eW1
eW2
eW3
eW4
eW5
eW6
eW7
CRMP1
CRMP2
CRMP3
CRMP4
SEC1
SEC2
SEC3
SEC4
SEC5
SEC6
CS1
CS2
CS3
CS4
CS5
PC1
PC2
PC3
PC4
PC5
PC6
(1)
5.2
8.2
5.0
4.1
2.1
0.0
0.0
7.1
5.2
2.0
5.1
2.0
5.1
4.0
2.0
6.1
1.0
2.0
0.0
1.0
4.0
3.0
0.0
0.0
0.0
0.0
0.0
0.0
(2)
9.3
19.6
17.0
10.2
9.3
5.1
5.2
5.1
10.3
7.1
14.3
14.3
13.1
14.1
11.0
23.2
9.3
9.1
7.1
15.0
13.1
11.0
5.2
7.1
11.2
8.2
9.2
6.1
(3)
15.5
15.5
25.0
15.3
24.7
9.2
13.4
12.2
15.5
14.3
13.3
21.4
16.2
22.2
25.0
21.2
22.7
12.1
21.4
17.0
21.2
15.0
16.5
28.6
21.4
17.5
13.3
20.2
(4)
30.9
29.9
33.0
33.7
22.7
28.6
39.2
34.7
39.2
38.8
35.7
38.8
34.3
33.3
42.0
28.3
45.4
53.5
42.9
42.0
35.4
39.0
41.2
33.7
35.7
36.1
43.9
34.3
(5)
23.7
17.5
12.0
21.4
26.8
25.5
22.7
20.4
14.4
14.3
15.3
12.2
17.2
15.2
11.0
11.1
12.4
15.2
15.3
15.0
15.2
22.0
16.5
18.4
19.4
21.6
23.5
23.2
(6)
12.4
8.2
6.0
10.2
13.4
23.5
10.3
16.3
13.4
19.4
11.2
9.2
14.1
10.1
7.0
9.1
8.2
7.1
12.2
7.0
8.1
9.0
19.6
10.2
7.1
9.3
9.2
7.1
(7)
3.1
1.0
2.0
5.1
1.0
8.2
9.3
4.1
2.1
4.1
5.1
2.0
0.0
1.0
2.0
1.0
1.0
1.0
1.0
3.0
3.0
1.0
1.0
2.0
5.1
7.2
1.0
9.1
Mean
SD
4.13
3.64
3.58
4.15
4.15
4.77
4.49
4.23
4.02
4.38
3.97
3.89
3.91
3.80
3.81
3.50
3.90
3.99
4.09
3.88
3.82
4.01
4.33
4.01
4.05
4.31
4.15
4.29
1.43
1.47
1.33
1.45
1.31
1.30
1.28
1.45
1.41
1.33
1.51
1.28
1.39
1.34
1.17
1.43
1.11
1.08
1.10
1.24
1.37
1.25
1.17
1.13
1.23
1.30
1.13
1.26
5.2. MEASUREMENT MODEL
For e-transformation, three indicators (eW5, eW6, eW7) were deleted due to their factor
loadings being less than 0.6.2 Except for these items, all the factor loadings are greater
than 0.6 (t-values are significant at 0.001) and the criteria of fit are satisfied (CMIN/d.f. =
1.412, CFI = 0.959, TLI = 0.949, RMSEA = 0.064), which means unidimensionality and
convergent validity are satisfied. In addition, scale reliability is verified since the values
of Cronbach’s alpha for the three factors are larger than 0.8 and all the values of construct
reliability are greater than 0.7. In addition, all values of variance extracted are greater than
0.5. Finally, concerning discriminant validity, most of the correlation coefficients among
the latent constructs (0.699 between e-W and CRMP, 0.747 between CRMP and Sec, and
0.787 between e-W and Sec) do not exceed the cut-off point of 0.85, as suggested by
Kline (1998), which means that the discriminant validity among the factors examined in
the present study is initially supported. In summary, the CFA approach has demonstrated
that the measurement models satisfy the issues of validity and reliability, as Table 10
shows. This result supports our first hypothesis concerning the composition of eTransformation, i.e. “e-Transformation consists of e-Workplace, CRM and security”.
Based on the result of confirmatory factor analysis on e-Transformation, a second order
measurement model was established as shown in Figure 1.
Figure 1: Second order measurement model of e-Transformation in container ports
2
Loadings 0.50 or greater are considered practically significant. Loadings exceeding 0.70 are
considered indicative of a well-defined structure, which is the goal of any factor analysis (Hair et
al. 2006). For this research, we use 0.60 as our critical value.
11
Table 10: Confirmatory factor analysis and construct reliability
Construct
e-Workplace
Customer
Relationship
Management in
Practice
Security
Customer
Satisfaction
Port
Competitiveness
Item
Stand.
Weight
Critical
ratio
R2
eW1
eW2
eW3
eW4
CRMP1
CRMP2
CRMP3
CRMP4
Sec1
Sec2
Sec3
Sec4
Sec5
Sec6
CS1
CS2
CS3
CS4
CS5
PC1
PC2
PC3
PC4
PC5
PC6
0.72
0.71
0.80
0.64
0.69
0.80
0.60
0.76
0.83
0.84
0.78
0.79
0.83
0.65
0.79
0.85
0.74
0.68
0.75
0.68
0.71
0.76
0.79
0.76
0.63
6.42
7.13
5.86
6.73
5.25
6.50
10.05
9.03
9.25
9.90
7.05
9.14
8.02
6.84
8.12
6.34
6.76
6.98
6.76
5.73
0.51
0.50
0.64
0.42
0.47
0.64
0.36
0.58
0.69
0.70
0.61
0.63
0.69
0.42
0.62
0.73
0.55
0.46
0.58
0.47
0.50
0.57
0.62
0.58
0.40
Cronbach
Alpha
CR
VE
0.81
0.81
0.52
0.80
0.80
0.51
0.91
0.91
0.62
0.86
0.87
0.58
0.86
0.87
0.52
Next, in the measurement of customer satisfaction and port competitiveness, the
constructs used in this study are confirmed to be appropriate. All the factor loadings are
greater than 0.6 and their t-values are significant at the 0.001 level. In addition, the
criteria of fit indices are satisfied (CMIN/d.f. = 1.815, CFI = 0.940, TLI = 0.922, RMSEA
= 0.090). Scale reliability is verified since the values of Cronbach’s alpha for the two
factors are larger than 0.8 and all the values of construct reliability are greater than 0.7 as
presented in Table 10. In addition, all values of variance extracted are greater than 0.5. In
addition, the correlation coefficients between the latent constructs (0.56 between CS and PC)
do not exceed the cut-off point of 0.85, and thus in consequence, discriminant validity is
satisfied.
5.3. STRUCTURAL MODEL
The main objective of this study is to analyze the impact of e-Transformation of port
information system on customer satisfaction and port competitiveness. We established
second order measurement model for e-Transformation (e-T) composed of e-workplace
12
(eW), customer relationship management in practice (CRMP) and security (Sec), and
considered two performance constructs, i.e. customer satisfaction (CS) and port
competitiveness (PC). The hypothesized relationships between the 3 constructs are shown
in Figure 2 and the results are summarized in Table 11.
Figure 2: Hypothesized relationships among proposed latent variables
H2 & H3: Structural model
H1: Measurement model
e-W
CS
CRMP
e-T
PC
Sec
Table 11: Results of structural model estimation
Causal path
Estimate
S.E.
C.R.
P value
a
e-T
Æ
CS
0.820(0.816)
0.146
5.628
***
e-T
Æ
PC
0.367(0.401)
0.163
2.256
.024
CS
Æ
PC
0.428(0.469)
0.157
2.734
.006
e-W
Å
e-T
1.000(0.832)
CRMP
Å
e-T
1.054(0.882)
0.197
5.353
***
SEC
Å
e-T
1.055(0.901)
0.181
5.844
***
Notes: a Standardized parameter estimates, ***Significant at p < 0.001
The minimum requirements for model identification are satisfied and the fit
indices (CMIN/d.f. = 1.682, CFI = 0.881, TLI = 0.866, RMSEA = 0.083) are marginally
acceptable. The three hypothesized paths (e-T Æ CS, e-T Æ PC, and CSÆ PC) are found
to be statistically significant. The following are the hypothesis test results and
implications. First, hypothesis 2 has postulated that e-Transformation (e-T) affects
13
customer satisfaction and port competitiveness. In particular, it was presented that eTransformation in the container terminal could exert significant influences on port
competitiveness both direct way and indirect path through customer satisfaction. Next, the
hypothesis that customer satisfaction (CS) affects port competitiveness (PC) is
statistically significant with a standardized effect of 0.469. This result implies that
customer satisfaction can directly affect port competitiveness and that e-Transformation
factors have a significant direct impact on customer satisfaction and indirectly on port
competitiveness through customer satisfaction.
6. CONCLUSION AND IMPLICATIONS
The present study has revealed that e-Transformation, consisting of e-Workplace,
customer relationship and security management constructs, has a positive impact on
customer satisfaction and port competitiveness through direct and indirect paths.
Consistent with our a priori expectations, container port e-Transformation is not only an
important factor of customer satisfaction and loyalty, but is also an important source of
port competitiveness. These findings provide an empirical support for the need for
container terminals to adopt e-Transformation while at the same time unraveling the main
components of e-Transformation.
These finding have serious policy and strategic implications. Since e-Workplace,
customer relationship management and security constitute the main components of port etransformation, the strategy to be pursued by container terminals to improve and maintain
their competitiveness should focus on effective and efficient provision of fundamental
information, building their relationships with their major port users and on establishment
of a terminal information system that follows safety and security regulations with an
effective response to external acts of terrorism.
The significant role of security in the determination of customer satisfaction and
port competitiveness provides further evidence about the positive link between security
initiatives and port competitiveness. This implies that customer satisfaction is more
concerned with security, safety and privacy of information than merely with efficiency in
port operations. Since 9/11 terrorist attack in the US, shipping lines as well as ports have
been more concerned about safety and security of their business information from
possible infringements of privacy and external attacks.
Thirdly, the finding that e-transformation in port management has a significant
influence directly on port competitiveness and indirectly through customer satisfaction
implies that the impact of e-transformation extends beyond the port area down to the endpoint of the supply chain. This means strategically that ports that adopt e-transformation
are not only winning loyalty from their direct clients – the shipping lines, but also the
14
loyalty and trust from the shippers and freight forwarders along the supply chain.
Although the findings of the study have contributed to the literature by
empirically confirming the positive relationship between port e-Transformation, customer
satisfaction and port competitiveness, the study suffers from some limitation. This study
relies on cross-sectional data at one point in time. The impact of port e-transformation
may not be observable at one point in time but over time. For future studies, it would be
interesting to include container terminal workers and port management staff, cargo
owners and forwarders. Further, changes in e-Transformation over time and its impact on
port performance can be assessed using time-series data. In spite of this limitation, due to
limited empirical studies on the impact of e-Transformation on container terminal
performance, the findings of this study have provided an empirical support for the
importance of e-transformation in container terminal management and further basis for
more empirical studies in this area.
15
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