Competitive Advantage and Business Performance of Forwarding Companies in Jakarta

Introduction: The forwarding industry in Indonesia faces a complex array of challenges that significantly affect operational performance and the competitiveness of companies. One of the primary challenges encountered is the complexity of regulations. Frequently changing export-import regulations compel companies to continuously adapt and update their understanding of the latest policies. Lengthy licensing processes and complicated bureaucracy delay shipping times, increase operational costs, and add to the burden of understanding different regulations in each region. Research by Istan (2021)indicates that compliance costs with regulations can reach 10-15% of total operational costs, which can erode profit margins for companies. Objective: This research aims to explore the determinants of competitive advantage and its implications for the business performance of forwarding companies in Jakarta during the 4.0 industrial era. In this context, we consider the influence of service differentiation, logistics service quality (LSQ), and information and communication technology (ICT) on competitive advantage and its impact on the business performance of forwarding companies in Jakarta. Methods: Employing a quantitative approach with a descriptive design, this study involves 300 respondents from forwarding companies in Jakarta, selected through purposive sampling techniques. The data obtained were analysed using Structural Equation Modelling (SEM) with Partial Least Square (PLS). Results: The analysis results indicate that service differentiation and LSQ significantly influence competitive advantage and positively contribute to the business performance of forwarding companies in Jakarta. Meanwhile, ICT shows a positive influence on competitive advantage but does not have a direct impact on business performance. Furthermore, competitive advantage plays an effective mediating role between service differentiation and business performance. Conclusions: These findings provide valuable insights for forwarding companies in adapting competitive strategies that can enhance performance in an increasingly competitive market.