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This article attempts to address the literature void by investigating IFF customers' perceptionsof important factors used by their companies to select international freight forwarders.Although transport choice decisions have been a popular topic in the transportation andlogistics literature since about 1970, transportation intermediaries such as IFFs have receivedlittle, if any, attention in the transport choice literature. Most transport choice studies have

investigated key factors in either modal or carrier selection, with motor carriers being themost popular mode of study.

Empirical investigation of the key factors used by customers to select IFFs is important forseveral reasons. First, while the literature has delineated various factors which might be usedin forwarder selection, these suggestions have tended to be anecdotal - and not empirically

based - in nature. Second, the logistics discipline is increasingly embracing the concept of"tailored," or segmental, logistics. Briefly, this concept suggests that different groups ofcustomers often have different logistical requirements, and thus need logistics programs and

policies tailored to their particular requirements.

Selection factors for IFFs

Given the growing recognition that company and/or respondent characteristics may influencetransport choice factors, this article will investigate the influence of company and/orrespondent attributes on IFF selection factors. This will be done by analyzing several

propositions based on company and/or respondent attributes.

P1: IFF selection factors will be influenced by firm size. Firm size has frequently been used

as a differentiating variable in logistics research. For example, larger firms tend to makegreater use of electronic data interchange than do their smaller counterparts.

(19) P2: IFF selection factors will be influenced by the degree of forwarder usage. Degree ofusage is a commonly used market segmentation tool; heavy users of a product/service oftenhave different demographic profiles when compared to light users. As an example, over 80

percent of all greeting card sales are to females.

(20) P3: IFF selection factors will be influenced by the degree of usage of watertransportation for cross-border shipments. As was the case for P2, degree of usage is acommon market segmentation variable.

P4: IFF selection factors will be influenced by the period of time forwarders have been used.A recent

P4: IFF selection factors will be influenced by the period of time forwarders have been used.A recent study of third-party logistics providers used "length of time" as a differentiatingvariable, and suggested that "older" third-party providers may have a different perspectivethan their "younger" counterparts with respect to the requirements for successful third-partyrelationships.

(21) P5: IFF selection factors will be influenced by the degree of current satisfaction withforwarder services. "Degree of satisfaction" was used as a differentiating variable in a study

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of warehousing practices, where it was found that managers who were more satisfied withtheir workers tended to employ different recruitment, selection, and motivating techniques.

(22) P6: IFF selection factors will be influenced by the respondent's length of time in theirpresent position. Length of time in one's position has often been used as a differentiating

variable in logistics research, as seen in Hall and Wagner's discovery that less experiencedtraffic managers place a greater importance on freight rates than do their more experiencedcounterparts.

METHODOLOGY

The propositions will be evaluated using data collected from a mail survey. While mailsurveys have distinct limitations (as do all data collection methodologies), such as the

potential for nonresponse bias, mail surveys were viewed as superior to other methodologiesfor several reasons. First, the mail survey offers a relatively low cost method for collectingdata from a potentially large group of respondents. Also, the respondent can complete the

mail survey at his or her convenience, and it offers an opportunity for respondent anonymity.

Moreover, mail surveys were viewed as an acceptable methodology because the relevantselection factors (listed in Table 1) were established either through a literature review orinterviews with a group of IFF customers. For example, some of the variables were drawnfrom the work by Ozsomer and colleagues, who developed an expert systems approach tomodeling the selection process for IFFs.(24) Expert systems are generally based on the actualhuman thought process; as such, the selection variables appearing in the Ozsomer studyshould reflect those being used by IFF customers. Similarly, other selection variablesincluded in this study emerged from discussions with several current IFF customers locatedin a major metropolitan area.

The mail survey was sent to 375 randomly selected members of the Council of LogisticsManagement (CLM). We recognize that other sampling frames (e.g., a directory of exportersand importers) might be better for identifying current IFF customers. However, resourceconstraints did not allow for acquisition of such sampling frames; as a result, alternativesampling frames were considered. The CLM was chosen because its breadth and depth ofmembership appeared to offer a good opportunity to capture information from aheterogeneous group of IFF customers.

Each potential respondent received a cover letter, a copy of the survey, and a postage-paid

return envelope. Respondents were also given the option of responding by fax, although veryfew chose to do so. A follow-up mailing was conducted one month after the initial mailing.Five questionnaires were returned as undeliverable, reducing the effective sample size to 370.A total of 71 usable responses were received, for a 19.2 percent response rate.

Nearly 60 percent of the respondents reported annual revenues of at least $1 billion, while 50percent reported employing at least 5,000 workers, neither of which is surprising given thatthe CLM membership skews towards larger organizations. Furthermore, approximately 40

percent of the respondents indicated that IFFs are used for all of their companies' cross-border shipments; nearly 75 percent of the respondents have utilized IFFs for at least tenyears. The latter two demographic characteristics suggest that the responding organizations

are familiar with the operations of international freight forwarders, and would beknowledgeable concerning factors used to select IFFs.

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Key Factors Used to Select IFFs

Using a Likert-type scale where 1 = very unimportant and 5 = very important, respondentsevaluated twelve factors which might be used when selecting IFFs. The selection results,

presented in Table 2, indicate that "forwarder's expertise" and "reliability of service" are

the two most important selection factors. Indeed, these two factors were rated as "veryimportant" by approximately 75 percent of the respondents. Alternatively, "forwarder size"emerged as the least important selection factor, only 25 percent of the respondents rated"size" as either "important" or "very important."

[TABULAR DATA FOR TABLE 2 OMITTED]

There are several intriguing findings appearing in Table 2. Although "pricing" emerged withan average rating of 4.04 ("important"), it ranked but sixth in importance among the IFFselection factors. This appears to support literature suggestions that (1) "freight rates are animportant variable that should not be ignored" in transport choice decisions, and (2) freight

rates are less important in more specific (e.g., the selection of IFFs), as opposed to moregeneral (e.g., selecting logistical intermediaries), transport choice decisions.(25)

Table 2's results also appear to support suggestions that smaller forwarders can continue to beviable players in the increasingly consolidated forwarding industry.(26) For example, thesurvey respondents ranked "forwarder size" as the least important factor in forwarderselection; almost 50 percent indicated that size is a "neither unimportant nor important"consideration.

Small forwarders also appear quite capable of satisfying several of the more important factorsappearing in Table 2. For example, small forwarders can provide the necessary expertise (thetop ranked factor) sought by users, as seen in the following quote: "A forwarder may beworking from his kitchen table in Miami. But he can be a specialist in Latin America if heknows the language and how the market works."(27) Moreover, smaller forwarders are likely

better able to provide personal attention (ranked fourth) than their larger counterparts.