Total Quality Management/Service Excellence in Container Shipping Industry: Comparison
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Service quality (SQ) is an important factor in sustaining relationships with your clients in the container shipping industry. Clients who request containership services have transportation needs that prioritize punctuality, reliability, connectivity, and other criteria over low freight rates. To put it another way, clients that utilize container shipping are more concerned about SQ; thus, total quality management (TQM) practices must be implemented to ensure high SQ levels that meet customer expectations. To do so, shipping firms must coordinate six TQM practices: managerial leadership, employee involvement, customer focus, process management, training, and supplier quality management in order to improve five SQ dimensions: tangibility, reliability, empathy, assurance, and responsiveness. This will help them perform better financially.

  • container shipping
  • total quality management
  • shipping service quality

1. Introduction

Container transport is widely recognized as a highly interconnected global supply chain, mostly owing to the inherent capability of a single container, packed with cargo, to be seamlessly transferred between various modes of transportation [1]. Therefore, container shipping lines play an important role in international trade and global supply networks [2]. In the same vein, the transportation and shipping industries in Jordan are critical components of the country’s infrastructure and have a substantial impact on the country’s level of economic growth [3]. The primary challenge for firms in the container shipping industry is to make a profit through maximizing efficiency, such as obtaining high levels of vessel capacity utilization to improve their financial performance (FP) [4]. On the other hand, firms are required to maintain sustainable client relationships and excellent management of profitable ones [5,6][5][6].
Service quality (SQ) is an important factor in sustaining relationships with your clients in the container shipping industry [2,7][2][7]. Clients who request containership services have transportation needs that prioritize punctuality, reliability, connectivity, and other criteria over low freight rates [6]. To put it another way, clients that utilize container shipping are more concerned about SQ; thus, quality management procedures must be implemented to meet customer expectations [8,9][8][9]. Therefore, the necessity of total quality management (TQM) practices is a major concern for all firms to ensure that customers receive high-quality service and other business outcomes [10,11][10][11]. This is applicable to a variety of manufacturing and service industries, as well as to the maritime industry, particularly in container shipping [2]. As a result, quality must be enshrined in every area of an organization’s operations in the shipping industry, ensuring that all tasks are completed correctly the first time and that all obstacles are eliminated along the service process [8].
The study landscape in the field of container shipping businesses has revealed a notable gap in the interaction between SQ, TQM, and their impact on FP. While extensive research has been conducted on the effects of SQ on customer satisfaction and loyalty, as well as TQM’s role in operational efficiency and cost reduction, there is a scarcity of comprehensive studies that bridge these domains to examine their combined effects on the financial health of container shipping firms [2,5,6][2][5][6]. Therefore, incorporating TQM and SQ concepts in the container shipping industry is a little-discussed topic, especially in a developing country such as Jordan, and not much research has been conducted in this field [2,8,9,12][2][8][9][12].

2. Financial Harmony of Container Shipping Firms through Total Quality Management and Service Excellence 

2.1. Total Quality Management (TQM)

TQM is a long-standing management concept that spans all aspects of business and is a widely acknowledged organizational approach for firms looking to succeed both worldwide and domestically [13,14][13][14]. It is a representation of how managers have developed their understanding of quality over time. This evolution has been aided by inspection, quality control, and assurance methods [15,16][15][16]. As a result, changes in the concept of quality have been linked to the development of the TQM concept [11,17][11][17]. As quality lies in the eyes of the observer, there is no consensus on a single definition [18].
TQM has also been addressed in a variety of ways, such as the pursuit of perfection, cultivating a “get it right the first time” mentality, and focusing on customer demands and needs. In the end, this would result in better organizational performance due to improved product and service quality that satisfies customers [14,19][14][19]. This makes TQM challenging to adopt, and every industry has unique TQM practices connected to the goods and services they provide [20]. However, TQM mainly aims at protecting the interests of consumers, employees, and stakeholders by focusing on continuous improvement, customer focus, employee empowerment, and top management commitment [14,16][14][16].
There are numerous TQM classifications; the six dimensions proposed by Thai and Jie [8]. The management leadership dimension (ML) refers to the extent to which top management is held accountable for performance quality as well as the extent to which department heads participate in the quality enhancement process. As for the training dimension (TR), it refers to quality training provided to managers and employees and to promoting training to encourage cooperation and continuous improvement. The customer focus (CF) dimension refers to demonstrating how an organization actively seeks ways to improve its primary service in order to increase customer satisfaction. Furthermore, the supplier quality management (SQM) dimension refers to the extent to which long-term relationships are made available to suppliers, as well as how they are evaluated in terms of quality, cost, and delivery performance. As for the process management (PM) dimension, it indicates how managers monitor and uncover variability in work procedures, as well as the number of procedures with in-process quality measures. Finally, employee involvement (EI) refers to how employee suggestions and innovations are prioritized and how employees are encouraged to find flaws in their work.

2.2. Service Quality (SQ)

Since SQ is made up of a number of customer-pleasing service qualities or dimensions, they are interpreted differently in different business contexts and by different people, so there is no clear indication of what they are [2]. Furthermore, some SQ dimensions which are associated with intense passions and complex experiences are transcendent and cannot be directly viewed or observed [21]. In today’s maritime field, the concept of service quality has far outgrown the limits of carrier or port selection criteria. Quality has a broader scope than simply providing quality services; in a variety of studies on quality in shipping, it includes many other factors [7].
Frameworks for distinguishing aspects of SQ have been developed in the literature. One SQ study proposed that the quality of a service could be sensed both during the service, called functional quality, and after the service was completed, called technical quality. Technical quality relates to what the customer receives or even the quality of the service encounter, whereas functional quality is concerned with how consumers view the service or the quality of the service contact [22,23][22][23]. Consequently, the GAP model for SQ was developed as the gap between the expected and perceived scores of service dimensions [24]. Five SQ dimensions are used to score these outcomes: tangibility, responsiveness, reliability, assurance, and empathy. They constitute the SERVQUAL instrument, which is believed to be general and may be used in several circumstances. For example, the SERVQUAL model can be applied within the retail industry to evaluate the SQ offered by retail stores. This evaluation encompasses various aspects, such as the physical aesthetics of the store, the dependability of product availability and pricing, the promptness and effectiveness of staff members, the competence and professionalism of the sales personnel, as well as the extent of personalized attention provided to customers. Furthermore, it can be utilized within the hospitality industry to assess the level of SQ provided by hotels, restaurants, and resorts. Moreover, it is applicable within the shipping and logistics industries to evaluate the efficacy of their services with regards to punctuality of deliveries, state of merchandise upon receipt, promptness in addressing customer queries, and holistic consumer satisfaction. This encompasses ports and terminal operators, wherein the model can evaluate their performance in terms of effective cargo handling, the implementation of safety and security measures, and the provision of customer service at several points of interaction inside the port.
It is also based on customers’ overall SQ judgments [7,21][7][21]. Tangibility means that customers will assess a service’s quality based on its outward appearance. They indicate the physical facilities, appearance of employees, machinery, and information system of the firm. Reliability means that companies provide excellent service from the beginning. It also illustrates that firms work hard to keep promises and focus most on outcomes. Empathy indicates that the company treats each customer with care and individual attention in order to show that the company is doing everything necessary to suit his needs. Assurance is employees’ knowledge and courtesy, as well as their ability to express trust and confidence. Responsiveness is the desire of the service provider to support clients, provide timely service, and respond to their requests, concerns, or issues [23,24,25][23][24][25].
SERVQUAL’s efficacy as a method for assessing SQ in shipping has been questioned, as it may not account for the container shipping industry’s unique characteristics [25]. However, Hsu [25] modified the SERVQUAL model items in the context of container terminal service operations to better reflect the nature of the industry. Thus, the SERVQUAL model modified in the context of container shipping services, which has five SQ dimensions, was used [23,25][23][25].

2.3. Financial Performance (FP)

The FP of firms is one of the most important aspects that businesses strive to measure in order to succeed and survive in a competitive market [26]. FP measurement is a crucial aspect of the shipping industry, which involves the transportation of goods and commodities across the world’s oceans [27]. The shipping industry is a complex and highly competitive sector that requires effective financial performance measurements to assess the profitability and efficiency of shipping companies [10]. According to Syriopoulos et al. [28], financial performance measurement is critical in the shipping industry as it enables companies to track their financial performance over time, identify areas for improvement, and make informed decisions about investment and divestment strategies. Common financial performance measures in the shipping industry include revenue growth, profit margin, return on assets, return on equity, return on investment, and market position [26,27,28][26][27][28].
Moreover, some studies have emphasized the importance of incorporating non-financial performance measures in addition to financial performance measures in order to obtain a more complete picture of a company’s performance in the shipping industry [28,29][28][29]. The study included both financial and non-financial performance measures, which were represented by measuring FP in addition to TQM and SQ practices. As a result, container shipping companies can obtain a more accurate and holistic view of their overall performance and make better decisions to propel their business forward and improve their financial performance.

2.4. The Nexus between TQM and SQ

TQM is closely connected to aspects of SQ in the container shipping industry. Many studies have showed significant and positive effects of TQM on SQ [8,12,17,30][8][12][17][30]; however, there have been few studies that show how specific TQM practices significantly impact the level of SQ. The primary goal of TQM is to improve total quality, which is reflected in the process and quality of the service. Moreover, successful TQM implementation will result in higher quality and fewer reworks and cost reductions associated with poor quality [17,30][17][30].
In the service industry, TQM and SQ have received a lot of attention. TQM emphasizes continual improvement as a means of delighting and satisfying customers. To put it another way, TQM is linked to SQ because its goal is to make sure that a firm can fulfill its customers’ needs and expectations [20,31][20][31]. Moreover, TQM procedures that are implemented correctly can lead to considerable increase in SQ, and consequently increased customer satisfaction [30,31][30][31].

2.5. The Nexus between SQ and FP

Since the shipping sector is so important to international trade and transportation, it is crucial that companies in this sector offer top-notch services to stay ahead of the competition. Many studies have recently focused on the relationship between the shipping industry’s FP and SQ [27,32,33][27][32][33]. SQ is used to assess organizational capabilities, which are defined as a customer’s evaluation of a service’s overall quality or excellence, in which customer expectations are compared to customer views of service performance [24].
The effect of SQ on FP in the dry bulk shipping sector was investigated in a study by Gu and Liu [32]. According to the study, there is a link between service quality and financial performance, with better service producing better financial results. Moreover, collaboration and resource sharing among shipping companies to develop new services and enhance SQ help save costs, which in turn improves their FP [33]. According to another study, SQ has a significant direct impact on customer satisfaction and a direct impact on a firm’s FP through customer satisfaction [27].
Therefore, shipping companies should concentrate on enhancing SQ to increase client satisfaction and loyalty, which will enhance FP. These studies’ insights can help shipping companies make better decisions and increase their financial success.

2.6. The Nexus between TQM and FP

TQM is a management concept that is defined as an entire management philosophy that assists organizations in achieving high quality levels in all of their processes and procedures [18,19][18][19]. It also ensures the involvement of internal and external suppliers, customers, and employees in monitoring continuous progress [34]. Moreover, TQM is intended to improve, among other things, customer satisfaction, product quality, productivity, waste reduction, cost, time, and inventory levels, and consequently, the financial position of the firm [31]. The association between TQM and FP is well-established in the literature as a result of ongoing investigations into key TQM practices and their impact on FP. Previous studies examining the relationship between TQM and FP revealed a direct positive association [4,31,34][4][31][34]. Relatively few studies found no significant link between TQM practices and FP [35]. However, quality management practices are necessary for container shipping companies to improve the quality of their service to customers and, in turn, the financial performance of the company.
Consumer quality standards have risen in recent years, requiring organizations, both service and manufacturing, to implement TQM principles in order to meet client needs efficiently [36]. A study by Acquah et al. [36] sought to determine the impact of TQM practices on operational performance and how TQM practices interact to influence the operational performance of healthcare institutions. Their findings demonstrated that five of the seven TQM practices evaluated had an impact on operational performance [36]. A study by Niyi et al. [37] looked into the role of innovation speed in mediating the relationship between TQM and the success of small- and medium-sized businesses (SMEs). Their findings revealed that TQM was positively associated with operational performance as well as innovation speed, which has a significant impact on the relationship between TQM and the success of SMEs. The study broadened the understanding of innovation in terms of speed and its measures within TQM, with top management quality practices, employee quality management, customer orientation, process management, and employee knowledge and training being the five basic dimensions of TQM [37]. Moreover, a study by Bhaskar [38] provided an analysis of survey results pertaining to the implementation of TQM methods within manufacturing businesses in India. The primary objective of the study was to examine and ascertain the correlation between the implementation of TQM practices and their subsequent impact on organizational performance (OP). Their research findings indicated that TQM has a notable and statistically significant impact on market orientation (MO) [38]. In a similar vein, the findings of their study indicate that there is a positive and statistically significant relationship between MO and OP. Their study discovered a considerable and beneficial impact of TQM on the OP of manufacturing businesses in India [38]. Another study was conducted to evaluate the impact of TQM on customer satisfaction in the telecommunications industry, specifically focusing on the TQM-SERVQUAL framework [39]. The primary results indicated that the implementation of overall quality management had a notable influence on the level of SQ and customer satisfaction. It was determined that SQ exerts a beneficial impact on customer satisfaction [39]. Furthermore, the significance of SQ as a key factor in TQM for attaining customer satisfaction within the communications sector in Ghana was identified [39]. Finally, a study by Akanmu et al. [40] aimed to examine the mediating effects of organizational excellence on the association between TQM practices and sustainability performance.

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