Digitalization to Enhance Customer Satisfaction at APM Terminals

In business, the significance of customer satisfaction cannot be overemphasized. Indeed, with increasingly many firms providing similar goods or services, dissatisfied customers can easily look for other alternatives. Accordingly, firms do whatever it takes to retain customers and keep them happy (Kumar, 2016). With tremendous technological advancements over the years, firms are ever more relying on information technology (IT) as a valuable driver of customer satisfaction (Mithas, Krishnan and Fornell, 2005; Ryding, 2010; Deloitte, 2013; Jan and Abdullah, 2014; Meige and Schmitt, 2015). Whether it is processing a customer order or automating luggage handling, firms in diverse sectors and industries have adopted modern technologies in an attempt to enhance process efficiency. In fact, most organizational processes have now been digitalized -- they require just a click of a button or little manual work. While digitalization has generated important benefits for organizations in terms of reducing operational costs, it has created immense value for their customers, hence increasing customer satisfaction.

One context where digitalization can have enormous value for the customer is the port industry. The industry is concerned with a plethora of services ranging from container handling and shipping to port management, and inland logistics (Branch, 2012). Industry players have increasingly adopted digital technologies in an effort to serve their customers better. Among other technologies, cargo tracking technologies, surveillance systems, sensor technologies, wireless technologies, mobile equipment, drones, 3D printing technologies, and analytics technologies are gaining popularity in the port industry. These technologies have proved to be valuable in ensuring timely shipping and cargo delivery, guaranteeing cargo security, maximizing port capacity, improving process efficiency, and reducing operational costs for both port operators and their clients (Accenture, 2016; Heilig, Schwarze and Vob, 2017).

Nonetheless, there is little empirical evidence of the relationship between digitalization and customer satisfaction in the port industry. Focusing on APM Terminals (APM), the present study sought to fill this gap in literature. The study specifically sought to examine how the organization can make use of digitalization to improve customer satisfaction. APM is a Dutch multinational container terminal company. With its headquarters in The Hague and under the ownership of the global conglomerate Maersk Group, APM provides terminal operations, cargo support, port management, and container inland services to hundreds of customers in more than 60 countries around the world. The company boasts over 70 port and terminal facilities as well as more than $4 billion in revenue as of 2016, making it one of the largest container terminals and port operating companies worldwide.

Customer relationship management (CRM) literature strongly emphasizes the importance of healthy relationships between businesses and their customers (Ryding, 2010; Jan and Abdullah, 2014). Indeed, in the business world there has been a remarkable shift from product-oriented business to customer-oriented business (Mithas, Krishnan and Fornell, 2005). This has been informed by the need to lure new customer and maintain existing ones via long-term relationships. For a business organization, creating enduring relationships with customers entails undertaking activities aimed at establishing and maintaining a mutually beneficial relationship. The organization benefits through customer loyalty and profitability, while customers benefit by having their needs satisfied as per their expectations. For any prudent business organization, customer satisfaction is the prime goal (Bhatnagar, 2016)

The use of technology can drive customer satisfaction. Technology influences customer satisfaction by transforming customer service processes, increasing service quality, enhancing information exchange between businesses and customers, and boosting the organization-customer relationship (Ryding, 2010; Jan and Abdullah, 2014; Bhatnagar, 2016). Further, technology enables business organizations to lower operational and transaction costs, deliver offerings at a lower price, reduce delivery or wait times, as well as increasing the perceived value of products or services (Mithas, Krishnan and Fornell, 2005). This can have positive implications for customer satisfaction. Essentially, the study was based on the idea that technological adoption on the part of an organization drives customer satisfaction.

Digitalization offers a valuable opportunity for enhancing customer satisfaction (Mithas, Krishnan and Fornell, 2005; Ryding, 2010; Jan and Abdullah, 2014). However, much of the literature in this area has paid attention to the impact of IT investments on tangible organizational performance measures such as productivity, profitability, and market value. In other words, there has been little attention to the connection between IT investments and intangible aspects such as customer satisfaction.

The scarcity of scholarly attention to the impact of digitalization on customer satisfaction is particularly true for the port industry. Much of the literature in this area focuses on organizational metrics such as container capacity, output, and cost savings, giving little or no attention to customer satisfaction and other customer metrics (Branch, 2012; Lee, Tongzon and Kim, 2012). The scarcity of research within the context of the port industry may be due to the fact that the port industry has been relatively sluggish in adopting digital technologies compared to other industries. Indeed, the port industry has remained mainly unchanged for the last 50 years, and has been slow to embrace new technology. This means that industry players continue missing important opportunities to increase customer satisfaction. In the port industry, digitalization can be valuable for improving the efficiency of processes -- from forwarding and clearing processes to cargo operations, shipping management, and inland transportation. Without strong digital platforms, managing these processes can be a daunting task to the disadvantage of not only the port company, but also its clients.

Even so, the little literature available illustrates that digitalization in the port industry can positively affect customer satisfaction (Lee, Tongzon and Kim, 2012; Port Technology, 2015; Pernia and Santos, 2016; International Container Insurance [ICI], 2016; Accenture, 2016; Heilig, Schwarze and Vob, 2017). In the port industry, customers constantly require seamless movement of their cargo. Digitalization can enhance cargo movement through cargo tracking systems and other technologies, thereby improving the customer service experience. While this literature provides important insights relating to the impact of port digitalization on customer satisfaction, empirical evidence in this area remains scarce. The few studies available may not be readily generalized beyond the context in which they were conducted.

For APM, no research has been done to examine the link between digitalization and customer satisfaction. Since customer satisfaction is an important hallmark of organizational performance, it is crucial to understand how IT investments can influence customer satisfaction at the organization. APM serves a multiplicity of customers, including clearing and forwarding companies, export and import companies, and logistics firms. For these clients, inefficient processes due to lack of or inadequate digitalization may mean delays in cargo delivery, loss of cargo, and even loss of revenue, eventually resulting in customer dissatisfaction. Though APM has implemented various technologies such as cargo tracking systems, no evaluation has been conducted to examine the impact of the technologies on customer satisfaction. It is imperative for the organization to understand the value of digitalization, especially from the perspective of customer satisfaction.

The purpose of the study was to examine how the use of digitalization can enhance customer satisfaction at APM. The study specifically aimed to identify the current digitalization practices at APM, to evaluate the extent of customer satisfaction at APM, and to understand how APM can use digitalization to improve customer satisfaction. On the whole, the study provides important recommendations for the improvement of digitalization at APM.

1. What digitalization techniques has APM implemented?

2. What is the level of customer satisfaction at APM?

3. In what ways can digitalization affect customer satisfaction at APM?

Digitalization: The incorporation or employment of digital technologies into day to day processes with the aim of improving accessibility and efficiency (Lee, Tongzon and Kim, 2012; Meige and Schmitt, 2015). It may also refer to IT investments or the computerization of processes, systems, and jobs.

Customer satisfaction: The extent to which the goods and services provided by a firm meet or exceed the expectations of customers (Kumar, 2016).

Designed as a case study, the study adopted a mixed methods approach. More specifically, a semi-structured interview was conducted with APM's head of the value-based selling team as the respondent. The interview was used to gather information about the current digitalization techniques used at the organization. Following the interview, a survey of the organization's customers was conducted, keen on gathering information relating to customer satisfaction levels. Thematic, descriptive, and statistical techniques were used to analyze the data.

1.8 Significance of the Study

This study has significant implications for APM and the port industry as a whole. For APM, the study provides valuable counsel as far as digitalization is concerned. The study familiarizes the organization with how it can take advantage of digitalization to drive customer satisfaction. It is expected that the organization will pay greater attention to IT investments in an attempt to increase customer satisfaction. The findings of the study are valuable for not only APM, but also the larger port industry. Compared to many industries, the port industry has been quite slow to embrace digital technologies. This study, therefore, serves as a wakeup call for players in the port industry. To keep up with the demands of the 21st century, port industry players must provide their customers a better service experience. From a research perspective, the study adds to the growing body of literature on the connection between digitalization and customer satisfaction in the port industry. The study, therefore, provides an important foundation for future studies in this area.

The case study nature of this study is one of its major limitations. As the study focused on a single organization, there should be discretion when generalizing the findings to other organizations.

Overall, this study aimed to examine how digitalization can affect customer satisfaction at APM. The rest of the study is organized as follows. Chapter two provides a review of literature relating to digitalization and customer satisfaction. The chapter specifically focuses on the conceptual background of the study as well as empirical evidence relating to digitalization and customer satisfaction, in general, and specifically, within the port industry. Chapter three presents the findings of the study in accordance to the specified research questions. The chapter specifically summarizes digitalization techniques at APM, customer satisfaction levels, as well as the connection between digitalization and customer satisfaction at the organization. Chapter four discusses the findings of the study, clearly linking them to literature. In this chapter, attention is particularly paid to establishing the extent to which the present findings are consistent with extant literature. Finally, chapter five provides a summary of the study as well as recommendations for practice and research.

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