Do the factors affecting incoterms® selection differ for exporters and importers? A fuzzy analytical hierarchy process (fahp) application

Abstract

Background: There are a few studies that have findings regarding the factors affecting Incoterms® selection decisions, however, the importance weights of the factors weren't revealed prominently for importers and exporters separately. This study intends to overcome this gap by examining the factors that influence Incoterms® selections to find out whether there are any differences or not between exporters and importers. For this purpose, we analyzed the importance weights of each factor and ranked them for both two parties. Methods: We constructed a conceptual model based on different approaches, previous studies and expert decisions. Data were collected from 19 experts, 9 of whom are importers and 10 are exporters, via e-mail. We conducted Fuzzy Analytical Hierarchy Process (FAHP) with the geometric mean method to find out the importance weights of each criterion. Results: Findings of the study revealed that the most important factor influencing the selection of international commercial terms for both exporters and importers is “transportation costs” while the least important one is “firm size”. Four factors which are “relations with forwarding agents, type of goods, complexity of transportation and distance” differ according to importers and exporters in their selections. Relations with forwarding agents and distance are found to be more influential for exporters while the type of goods and complexity of transportation are more effective for importers. Conclusions: We conclude that cost related factors are the most influential ones and apart from a few factors, there is no significant divergence between the selection decisions of importers and exporters. The small sample size and the sample consisting of companies operating in different sectors in a particular region are among the limitations of the study. We suppose that the factors determined in this study will contribute to future studies with a larger sample using different analysis methods.