Assessing the Relational Benefits of Logistics Services (LSP) as Perceived by Automotive Manufacturers in Klang Valley using Structural Equation Modelling (SEM)

The increasing significance of logistics activities that extend across the boundaries of supply chain firms highlights the importance of managing relationships within the supply chain. Many automotive companies nowadays find outsourcing logistics functions to be a compelling choice. In the current landscape, a growing number of automotive companies are opting for outsourcing logistics functions. This shift is driven by the desire to attain strategic advantages in logistics with the ultimate goal of cost reduction. As the Malaysian automotive industry continues to grow annually, it is increasingly crucial for car manufacturers and assemblers in Malaysia to establish successful relationships with Logistics Service Providers (LSPs). In alignment with the current marketing concept that prioritizes relational benefits and insights derived from the supply chain management literature concerning consumer satisfaction, this research evaluates logistics service performance perceived by manufacturers. The validation process involves distributing questionnaires to 74 car manufacturing companies in Klang Valley area, achieving a response rate of 52.7%. In this study, the automotive companies are chosen to examine the relative importance of the three identified benefits, Special Treatment, Value Added (VAL), and Collaborative Benefits (COL) using Structural Equation Modelling (SEM) and a new benefit, Loyalty Benefit (LOY), was added to the framework. The contribution of this study includes providing new theoretical insights into the benefits–satisfaction–loyalty triad as applied by manufacturers and logistics service providers (LSPs). It also provides valuable perspectives on how to strategically evaluate logistics providers, aiming to transform a logistics firm from a tactical service provider into a closely integrated strategic partner