An Analysis of How Logistics Integration Affects Organizational Performance in Kenya's Clearing and Forwarding Sector. A Structural Equation Modelling Approach.

Abstract

The performance of logistics service providers in Kenya is marred by poor customer satisfaction, stemming from delays experienced in port clearance, disintegrated clearance systems, complex regulations, inefficient document processing and lack of integrated information systems. This study examined the effect of logistics integration on organizational performance among the Clearing and Forwarding firms in Kenya. It adopted a cross-sectional design and collected primary data through structured questionnaires. Simple and stratified random sampling were used to select respondents and ethical approvals obtained before collecting data using structured questionnaires. Data were collected from 298 employees from the operations, customer service, and finance departments. Using SPSS and SPSS AMOS 29, the study used descriptive statistics and structural equation modelling. The study findings revealed a disparity in the level of logistics integration among different Clearing and Forwarding firms in Kenya. This variance in logistics integration significantly impacts the overall organizational performance of these firms. From SEM analysis, the study established that logistics integration has a positive and significant effect (Path coefficient = 0.791, C.R = 5.664, P-value < 0.001) on the organizational performance of C&F companies in Kenya. The study concludes that enhancing logistics integration will lead to a substantial improvement in the organizational performance of C&F companies in Kenya. Thus, managers responsible for strategy should aim to collaborate with strategic partners such as state corporations managing ports and customs processes (KRA and Kenya Ports Authority), shipping lines, transportation companies, and other key stakeholders in the C&F supply chain in integrating logistics systems and processes.