Freight forwarders as value creators in maritime logistics: a system dynamics approach

Abstract

Purpose – Maritime logistics is a complex system comprising multiple logistic service providers and their diverse activities. While existing literature explores how logistic service providers create value through their activities, quantitative measures in this area remain limited, particularly within the context of maritime logistics. This study investigates value creation and measurement in freight forwarders’ activities within maritime logistics. The primary objective is to enhance strategic decision-making for policymakers and freight forwarding companies by analyzing the impact of the value-adding activities on this sector’s cumulative value generation. Design/methodology/approach – This study adopts Porter’s (1985) value chain framework to examine how freight forwarders generate value at the sectoral level. To measure and analyze the value creation of freight forwarders and their specific activities, a system dynamics approach is employed, utilizing causal loop diagrams and stock-flow diagrams. The Tanjung Priok port in Jakarta, Indonesia, serves as the case study. Additionally, scenario analysis is conducted to explore the relationships between individual activities and overall value creation within the freight forwarding industry. Findings – The key findings indicate that implementing an integrative strategy that concurrently enhances inland transportation and warehouse management activities can significantly boost the overall value generated by freight forwarders. However, greater emphasis should be placed on inland transportation activities as they contribute more substantially to value creation. From a policy perspective, prioritizing road infrastructure development and expanding warehousing capacity in proximity to port areas can further augment the value generated by freight forwarders. Originality/value – From a practical perspective, this study offers a framework for practitioners and policymakers to identify and prioritize critical activities that enhance the overall value of the freight forwarding industry. From an academic standpoint, it seeks to stimulate conversation among freight logistics researchers, encouraging further investigation into value creation and measurement for other maritime logistics service providers, such as shipping lines and port terminal operators, across various regions. This effort could deepen the understanding of value creation within complex logistic networks.