The Effects of Outsourcing Logistics Activities of Ethiopian Airlines on its Logistics Performance
No Thumbnail Available
Date
2016-06
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Addis Ababa University
Abstract
The impracticality of excelling at every task force companies to outsource some of their activities
especially logistics activities mostly considered as support activities by many companies. The
purpose of this study is to learn the rationale of Ethiopian Airlines behind outsourcing of its logistics
activities and study the impact of outsourcing Logistics activities of Ethiopian airlines on logistics
performance. The study is carried out using descriptive survey method. The researcher included 42
respondents using census. Data was gathered from the respondents by using questionnaires and
interview, respectively. Frequency, percentage and mean were used to analyze data collected through
questionnaire while the data obtained through interview was analyzed qualitatively. The study
discovered that the main reasons of Ethiopian Airlines for outsourcing its logistics activities is need
to access outside expertise, efficient utilization of company’s asset and saving in capital investment.
Further, the result indicated that Ethiopian Airlines benefited in the form of access to outside
expertise, saving in capital investment and efficient utilization of company’s asset. The study revealed
that the main challenge faced by Ethiopian Airlines is inefficient management of outsourced freight
forwarding activities. The major performance metrics Ethiopian uses to value the freight forwarding
service providers is based on time delivery of their shipments, responsiveness and flexibility to the
needs of Ethiopian by the service providers and overall quality respectively.
Finally, it is
recommended that, in collaboration with the Ethiopian Customs and Revenue authority Ethiopian
Airlines should avail customs clearance training to its employees so that they could be licensed as it
will help them control and support the TPL providers and it is also one step forward for their long
run plan of performing freight forwarding and customs clearance activities in house. Building up its
employees’ ability to enable them to monitor outside service providers and strict application of
performance metrics on the freight forwarding service providers are the other recommendations
forwarded.
Key words: Logistics, Freight forwarding, Logistics Outsourcing, Logistics Performance,
Performance metrics
Description
Keywords
Logistics; freight forwarding; logistics outsourcing; logistics Performance,; Performance metrics