Digitalization and customer satisfaction in the port industry

While digitalization has been shown to positively influence customer satisfaction in organizations in diverse sectors and industries, there has been little scholarly attention to the port industry. Focusing on APM Terminals, one of the largest container terminal and port management companies in the world, the proposed study seeks to fill this gap in literature. The study will take the mixed methods approach.

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 technology as a valuable driver of customer satisfaction. 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 proposed study seeks to fill this gap in literature. The study specifically seeks 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.

Problem Statement

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. This is particularly true for APM. Digitalization offers a unique opportunity for enhancing customer satisfaction. Within the context of container terminal operations, 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. 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. If APM is to enhance customer satisfaction, digitalization is an important priority. In essence, digital innovation is essential if the firm is to remain competitive.

Research Aims, Objectives, and Questions

Research Aim

The aim of this study is to examine how the use of digitalization can enhance customer satisfaction at APM.

Research Questions

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?

Research Objectives

1. To identify the current digitalization practices at APM

2. To evaluate the extent of customer satisfaction at APM

3. To understand how APM can use digitalization to improve customer satisfaction

4. To make recommendations for the improvement of digitalization at APM

Research Paradigm

Any research activity is guided by certain beliefs, assumptions, and philosophies. These beliefs constitute what is known as the research paradigm (Saunders, Lewis and Thornhill, 2015). Generally, a researcher may operate within the positivist paradigm or the interpretivist paradigm. Positivism asserts that knowledge is external, objective, and universal (Bryman, 2008). This means that a sample is used to make inferences about the general population. For generalization to be achieved, the researcher often utilizes a sufficiently representative sample. The size of the sample used in positivist research has important implications for the relationship between the researcher and the subjects. A large sample means that the researcher does not cultivate a closer relationship with the subjects (Saunders, Lewis and Thornhill, 2015). The researcher conducts an experiment or administers a survey often with little or no intimate involvement with the subjects. This is because the aim of the researcher in the positivist paradigm is to describe or examine causal relationships. As such, though it can be readily generalized to the larger population, positivist research usually does not provide a deeper understanding of the research problem. This is one of the major limitations of positivist research.

Interpretivist research, on the other hand, seeks to provide a more in-depth understanding of the research problem. Interpretivism is premised on the assertion that knowledge is subjective or contextual (Bryman, 2008). In other words, the experiences of a given entity may not be readily generalized to the larger population as different entities tend to interpret knowledge differently. This is one of the major limitations of interpretivist research. As an interpretivist researcher seeks to gain a deeper understanding of the research phenomenon, the sample used is usually smaller (Saunders, Lewis and Thornhill, 2015). In other words, the researcher focuses on a single or a few subjects. This enables the researcher to have a closer relationship with the subjects. The need for such a relationship explains why interpretivist research relies on techniques such as observations, in-depth interviews, and focus group discussions to collect data.

Selecting the research paradigm to use is often a daunting task for most researchers. This is particularly due to the inherent limitations of each paradigm. While positivist research yields more generalizable findings, it provides little understanding of the research phenomenon. Equally, while interpretivist research gives a deeper understanding of the research phenomenon, generalizing it beyond the sample is often difficult. At times, researchers find it more beneficial to operate within both paradigms -- the mixed methods approach (Creswell, 2014). This enables the researcher to have the benefits of positivist and interpretivist research at the same time. In this case, the mixed methods approach is deemed appropriate. While the research will have aspects of interpretivism, elements of positivism will also be involved. The objectives of this study are to identify the current digitalization practices at APM and to evaluate the extent of customer satisfaction. To gain a better understanding of the current digitalization practices at the firm, an in-depth interview would be more ideal, meaning interpretivist aspects would be used. Nonetheless, it would be important to understand how the firm\'s customers have benefited from its digitalization practices, warranting a customer survey.

Research Approach

The research paradigm the researcher chooses influences every aspect of the research process -- from the research approach and purpose to the research strategy, data collection techniques, sample selection procedures, and data analysis processes. As for the research approach, research may be either deductive or inductive. Deductive research essentially relies on deductive reasoning. This means that the researcher formulates a hypothesis based on extant literature, and then collects data to confirm the hypothesis (Bryman, 2008). The findings are then deduced to the general population under study. The deductive approach is often associated with positivist and quantitative research. The inductive approach, on the other hand, involves generating a new theory. Often used in qualitative research, inductive reasoning focuses on investigating a new phenomenon or examining a known phenomenon from a new perspective (Bryman, 2008). As the study will involve both positivist and interpretivist aspects, it will also encompass both deductive and inductive aspects.

Research Purpose

The purpose of a research may be exploratory, explanatory, or analytical. Exploratory research is research that aims to provide more information about a given phenomenon (Saunders, Lewis and Thornhill, 2015). It seeks to study the phenomenon more clearly and provide a better understanding. Explanatory research seeks to explain relationships between two or more variables -- cause and effect relationships (Creswell, 2014). Analytical research involves a critical evaluation of information and facts relating to a given topic or subject (Kothari, 2004). As little research has been conducted to examine how the port industry can utilize digitalization to increase customer satisfaction, this study would take the exploratory form. It is important to shed more light on this topic. Additionally, the study seeks to provide empirical evidence relating to the relationship between digitalization in the port industry and customer satisfaction. This means that the study will also be explanatory. Combining exploratory and explanatory elements would be consistent with the paradigmatic orientation of the research.

Research Strategy

There are three major types of research strategies: an experiment, a survey, and a case study. An experiment is a test or a trial conducted to confirm or refute a given hypothesis (Saunders, Lewis and Thornhill, 2015). Experimental research is the gold standard of research as it determines association and causality. However, experimental research may not be useful in this case as it is often used in natural and health sciences. The survey design would be more appropriate for the proposed study. Aimed at describing relationships between variables, a survey involves collecting data from a selected sample using a questionnaire (Creswell, 2014). A survey enables the researcher to collect and analyze data from a large sample with relatively less time, effort, and resources. One objective of this study is to examine customer satisfaction at APM. A survey would be the most appropriate strategy to achieve this.

Case study research is research that focuses on one or a few cases (Bryman, 2008). The case may be an individual, a group, an organization, or an event. This study will be a case study in the sense that it will focus on a specific organization -- APM. This means that the findings of the study will be specific to APM -- not the port industry in general or other organizations in other industries. The difficulty of generalization is one of the major shortcomings of case study research.

Data Collection

A researcher may rely on either primary data or secondary data to achieve the objectives of their study. Secondary data is data collected by other researchers (Kothari, 2004). The researcher uses the data to answer a different research question. By using secondary data, the researcher avoids the complexity of collecting primary data. Nonetheless, possible biases in the underlying data may present a problem. Primary data is data collected for the first time. It is original or first-hand data collected using surveys, interviews, and other types of data collection instruments (Kothari, 2004). Unlike secondary data, which is often readily available, primary data usually involves a tedious process of collection and processing. It involves a great deal of time, effort, and resources. In spite of this challenge, primary data is advantageous as it relates to the specific needs of the researcher.

This research will rely on primary data. As the research will utilize the mixed methods approach, the data will be collected using two instruments. First, a semi-structured interview will be conducted and then a survey (questionnaire). The interview will be used to gather information about the current digitalization techniques used at APM. With a semi-structured interview, a researcher has a set of pre-determined, open questions that prompt dialogue about a particular issue (Kothari, 2004). Though it may be time-consuming, a semi-structured interview enables the researcher to have a more in-depth conversation with the respondent (Saunders, Lewis and Thornhill, 2015). The interview will be recorded using a tape recorder.

The questionnaire will be used to collect information from the company\'s customers, keen on determining the extent to which they are satisfied with the company\'s customer service processes. For the questionnaire, the researcher can use a standardized questionnaire or a researcher-designed questionnaire (Bryman, 2008). While standardized questionnaires are scientifically tested for validity and reliability, they may not be useful in this case. As mentioned earlier, scholarly attention to this area is quite limited, making it difficult to find a suitable standardized questionnaire that serves the needs of this study. Therefore, a researcher-designed questionnaire will be used. The researcher will rely on the organization to administer the customer satisfaction survey.

Sample Selection

As mentioned earlier, this study will be a case study. This means that the study will focus on a specific organization. Within the organization, data will be collected from two sets of subjects: the value-based setting team and the organization\'s customers. For the value-based selling team, the head of the team will be selected as the respondent. This is judgmental sampling, which means that the researcher selects subjects based on their experience and knowledge of the subject matter (Kothari, 2004). The head of the team will provide information relating to the firm\'s digitalization strategies. By virtue of his position and experience, the head of the team is the most suited individual to provide the required information.

APM serves hundreds of clients, including shipping companies, logistics providers, clearing and forwarding companies, and import and export companies. Such a complex client base makes the selection of customers to participate in the study a daunting task. Stratified sampling will be used to locate the sample. This is a form of random or probability sampling which involves grouping the target population into sub-groups, and then drawing a simple random sample from each subgroup (Bryman, 2008). Stratified sampling may be tedious, but it minimizes selection bias. In this case, APM\'s customers will be grouped according to segment -- for instance, logistics companies, shipping companies, etc. A sample proportionate to the total population will then be drawn from each segment.

Data Analysis

Two forms of data will be used in this study: interview data and survey data. The interview data will be first transcribed and then subjected to thematic analysis to identify themes relating to the research topic. The survey data will be analyzed using SPSS version 17. The software will be specifically used to generate descriptive statistics as well as statistical tests. Descriptive statistics will involve averages and frequencies. For instance, the analysis will determine the proportion of customers that feel satisfied with the firm\'s customer service processes. As for statistical tests, correlation and regression analyses will be performed to determine the nature and magnitude of the relationship between digitalization and customer satisfaction at the firm.

Limitations

This research will focus on a single organization. This means that the findings will be limited to the organization.

Ethical Considerations

The relevant ethical guidelines will be adhered to while conducting the research. First, permission to conduct the study will be sought from the Institutional Review Board (IRB). It will also be important to seek permission from the target organization. Most importantly, the final report will not include personally identifiable information such as names of individuals.