The Role of Process Agility and Service Recovery Capability in Enhancing Customer Retention through Logistics Performance in Multinational Logistics Companies in Indonesia
DOI:
https://doi.org/10.38035/sjtl.v4i2.1181Keywords:
Customer Retention, Dynamic Capability Theory, Logistics Performance, Process Agility, Service Recovery CapabilityAbstract
According to PT. X, the percentage of air-shipment irregularities varied between 4.30% and 9.99% in 2024, with cargo damage accounting for over 50% of all recorded cases. This indicates that corporate clients of multinational freight forwarders in Indonesia do not perceive logistics performance as fixed. Few studies have examined the combined effects of process agility and service recovery capacity on retention, either directly or via logistics performance. This is because most of the existing research has focused on each of these factors independently. In this study, we use dynamic capability theory to follow the chain of events that begins with process agility and ends with service recovery capacity influencing customer retention via logistical performance. Out of 135 corporate customers surveyed by PT. X, 133 were deemed legitimate and evaluated using partial least squares structural equation modeling. Logistics performance is a strong predictor of retention and partly mediates the impacts of process agility and service recovery capacity, which are both positively correlated with logistics performance and retention. These findings suggest that international logistics providers would benefit more from enhancing process agility and service recovery capabilities simultaneously rather of focusing on just one of these areas independently, and that logistics performance is an essential determinant of retention.
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