Benefits and obstacles to e-business adoption in the freight and logistics sector

E-business allows companies to instantaneously share databases, forecasts, inventory and capacity plans, product information, financial data, and almost anything else that they may need to be operationally efficient and effective. Since transportation and logistics involves the movement of goods and the exchange of information between the members of the supply chain, e-business can help themto not only achieve great operational efficiency but also differentiate services thereby improving company competitiveness (Evangelista and Sweeney, 2006; Nguyen and Tongzon, 2012). The current study aims to evaluate the benefits and obstacles to e-business adoption using industry survey data and factor analysis.

The result from a survey of Australian freight and logistics companies indicates that the benefits of e-business adoption are increased competitiveness, service differentiation, value adding, improved customer satisfaction, supply chain integration, company’s image, market share, advertisement, cost saving and emissions reduction. The survey also found the main obstacles to e-business adoption being large investment expense, financial constraints, high running cost, lack of IT skills and access to IT consultancy, uncertainty, data security, incompatible services and customers uninterested in the new services.

Further investigation using exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) reveals the underlying (latent) factors in e-business adoption. The first factor pertains to the marketing or product differentiation benefits including improved company image, customer satisfaction and advertisement. The second factor pertains to improved efficiency due to cost saving, error reduction and more efficient operation. On the other hand, the obstacles to e-business adoption are attributed to the financial factors (e.g. large investment outlays, financial constraints, high maintenance costs anduncertain benefit), the technological factors (e.g. lack of IT skills, inability tochoose IT technology, access to IT services,the new services not supported by customers and incompatible service). The analysis results shed light on transport and logistics companies’ views toward the adoption of e-business.