Service quality and its relation to satisfaction and loyalty in logistics outsourcing relationships

Purpose - The purpose of this paper is to investigate how perceived service quality influences both a shipper's satisfaction and subsequent loyalty in third-party logistics outsourcing relationships. Design/methodology/approach - Critical service dimensions are identified and their impact on satisfaction and loyalty are developed into a theoretical model, which in turn is examined empirically using structural equation modelling from a survey of 235 industrial companies in Finland. Findings - The results support the satisfaction-loyalty model in a logistics outsourcing context confirming that service perceptions influence loyalty through a shipper's overall satisfaction with the service provider. Research limitation/implications - The empirical study is limited to Finland and data were collected before the financial crisis of 2008-2009 which affected the economy and this industrial sector. The theoretical constructs and model also need to be validated and tested further across a wider empirical context. Practical implications - Logistics service providers recognise the importance of service quality in outsourcing relationships. However, while the continuity of the current relationship is supported by good service quality, the efforts to extend the scope of the outsourcing arrangement need to be examined on a different basis. Originality/value - The paper is one of the first to investigate and confirm the service-satisfaction-loyalty paradigm in a logistics outsourcing context.