The United States Air Force supports weapons systems sold worldwide through the Security Assistance Program. The channel of distribution to deliver the material consists of the Air Force or a contractor in the United States, a commercial freight forwarder, and the recipient country. When material is lost somewhere in the distribution channel, the mission capability of the U.S. Air Force and the foreign air force may be impaired. In many instances, the U.S. Air Force must pay the replacement costs for items lost in shipment. The freight forwarder, who provides a variety of services, is the international distribution channel link and is contractually bound to the foreign country.; This research examines the effectiveness of services the freight forwarders provide their customer, the foreign country. Fifteen variables were tested to determine their relationship with the amount of material lost in the distribution channel. It was found that no single variable could establish such a relationship. Principal component factor analysis was used to form new groups from the fifteen original variables. When the new groups were tested, a relationship between the transportation facilitating variables and the amount of material lost was identified. Other principal component groups, which did not form a relationship with the amount of material lost, were the type of data transmission used in the channel, the type of customer served by the forwarder (military or civilian commercial business), the amount of years of experience of the freight forwarder, and the types of warehousing functions the forwarder performed. It was found that by using the transportation factors as independent variables, freight forwarder performance could be evaluated and predicted with reasonable accuracy.; The results of this research add to the body of literature on the performance evaluation of distribution channel members. It has presented a framework for identifying those factors or functions performed by freight forwarders which cause losses within a channel of distribution. This research has set a foundation for the international logistician to evaluate existing channel intermediaries as well as predict freight forwarder performance.
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