Determinant of Factors affecting Customer Satisfaction: Case of the Logistics Industry in Sri Lanka

Abstract

Sri Lanka is a key transshipment hub on the important East-West trade route. In terms of logistics performance, Sri Lanka ranked 94ft out of 167 countries according to the World Bank's Logistics Performance tndicator (LPI) for 2018. If Sri Lanka is to exploit and leverage its positioning to its fullest potential, then it is imperative that the country must improve on its overall positioning in the index, by being competitive, improving on efficiency and being sensitive to customer needs, Improving customer satisfaction is crucial for business sustainability, and importantly act as a deterrent to prevent customer switching. Although previous research has captured the relationship between customer satisfaction and service quality through a combination of the SERVQUAL (Service Quality) or SERVPERF (Service Performance) model, there are other controllable factors that can influence this relationship. The study examines from both a service as well as the performance perspectives and incorporates other controllable factors that influence customer satisfaction. The study is based on the third-party logistics (3PL) industry in Sri Lanka.It considered all the important influencing factors and their relationships with each other in a systematic review process and was supplemented by reviews from industry experts and data inputs from 3PL customers. It was found that customer handling, tech initiation, competitive prices, and flexibility, have a significance impact over the all the dependent variables (Customer Loyalty, Switching Behavior, Customer Complaints). The results could be used by the service providers, to realign their offerings to suit the demands of its customers and help the country become a logistics hub for the region.