Exploring preference heterogeneity of air freight forwarders in the choices of carriers and routes

This paper investigates important factors affecting the decisions of air freight forwarders in choosing air carriers and shipping routes. To examine the preferences and choice behavior across firms of various sizes, a total of 285 air freight forwarding firms offering air freight services from Taiwan to Asia or global were categorized into small, medium, and large by the average tons of cargo handled annually. The latent class model that identifies the heterogeneous preferences among different categories of air freight forwarders was found to performwell in estimating influential factors. The findings indicate that large-sized and medium-sized firms have different concerns about the choice of air carriers from small-sized firms, e.g., (1) offering shipping discounts for high-volume customers, (2) ensuring a low rate of lost, damaged or destroyed cargo, and (3) performing freight forwarding service consistent with the shipping agreements. The findings also identify heterogeneity in preferences for shipping routes between large-sized and small-sized firms, e.g., (1) destination airports providing efficient cargo handling services, and (2) destination airports offering fast and effective customs clearance services. 2014 Elsevier Ltd. All rights reserved.