THE FIRM'S LOCATION IN RELATION TO THE SEAPORT AS A KEY FACTOR IN ENHANCING FIRM PERFORMANCE IN THE MANUFACTURING SUPPLY CHAIN

Abstract

ABSTRACT In the context of the global supply chain management, port-hinterland transport is viewed as one stage in the logistics chain from origin to destination. This stage covers between 40 and 80% of the total cost of shipping containers internationally. Therefore, for Nigerian manufacturers looking to enhance their supply chains, improving port-hinterland transport operations may be an effective approach. However, the literature is unclear regarding the importance of hinterland locations in enhancing firm performance. This study investigates how the location of import-dependent firms in relation to seaports affects their profits in Lagos and Ogun States, Nigeria. The population of the study consists of 10 publicly listed manufacturing firms that frequently import goods in containers through the seaports in Lagos and have been continuously listed on the Nigerian Stock Exchange (NSE) list for more than ten years (2010- 2019). A structured questionnaire was employed in collecting primary data for the study. Only 6 of the ten firms filled and returned the questionnaires. This number accounts for 60% of the sample size. The results of the regression analysis show that the hinterland location has a strong positive relationship (r=0.731) with the profits of industrial products firms and that it explains around 53.4% (r2=0.534) of the variation in the profits of these firms. In order to transport goods between ports and industries efficiently, firms must look for strategic locations with access to cost-effective means of transportation such as rail and inland waterways. Similar to this, firms must understand how to prioritize their strategy in order to prevent the impact of rising port-hinterland transport costs on their revenue and profit.