Since differentiated, high-value goods may carry higher switching costs with lower import-demand elasticity, conventional trade theory predicts that they are resistant to tariff increases. The U.S.-China trade war altered this calculus: when tariffs become instruments of geopolitical rivalry, firms importing high-value, strategic products face national-security and regulatory pressures to decouple from Chinese suppliers, making these imports more vulnerable. Drawing on resource dependence theory and supply chain embeddedness, we test this argument using imports of 9,462 products at the 8-digit Harmonized System level from China over the 2018-2019 trade war. We find that high-value goods were more vulnerable to tariff increases than low-value goods, consistent with selective decoupling in strategic sectors. By contrast, goods from mutually dependent U.S.-China supply chains were more resistant. Pre-war import dependence on China, by itself, did not significantly affect imports. Mutual cross-border dependence, rather than dependence alone, emerges as a key determinant of trade resilience.

We examine whether penalties for lengthy tarmac delays in the US aviation industry deter such incidents or are instead regarded by carriers as an acceptable cost of doing business. Exploiting penalties imposed on marketing carriers for severe-weather tarmac delays as a quasi-natural experiment, we compare changes in taxi-out and taxi-in times, the rate of lengthy tarmac-delay incidents, and cancellation rates between penalized and non-penalized carriers using difference-in-differences and synthetic difference-in-differences estimators. We find modest improvements in operational performance following penalties but also observe, in several cases, no improvements or even adverse changes. Specifically, the deterrent effect of these penalties seems to weaken when they are small relative to carriers’ net incomes. Our results suggest that current penalties provide only limited deterrence and may be perceived by some carriers as an everyday cost of doing business, especially when financial conditions are favorable.

The rise of online shopping compelled physical retailers to improve their customers' shopping experience to remain competitive. Mobile Consumer Scanning Technology (MCST) has been employed by physical retailers to lower labor costs and reduce customer checkout times. MCST allows shoppers to use mobile devices to scan products as they are picked from shelves and placed into shopping carts. Checkout time can be saved since payments are made without the need for further product scanning. Thus, the technology transfers logistics functions from the retailer to the consumer with the promise to expedite the shopping experience. This study uses traffic data to examine the impact of MCST on performance metrics of a major US retailer, including visit frequency, the customer base, and in-store customer dwell time. Our findings reveal that MCST results in increased customer visits while expanding the retailer's customer base and market area. Moreover, MCST shortens in-store dwell time, offering time savings for shoppers. An extended analysis conducted to deepen the understanding of MCST shows that some impacts are short lived, while others are longer lasting. In summary, our findings advance the literature on consumer-centered retail technologies, highlighting both theoretical and managerial implications from the implementation of MCST.

This study identifies key challenges to achieving a resilient and sustainable cruise industry, examines stakeholder actions, and proposes strategies to balance these objectives. Employing a qualitative multi-method approach, it develops a theoretical framework for a resilient and sustainable cruise industry grounded in multi-level, multi-dimensional, and multi-stakeholder perspectives. The research design combines: (1) a review of extant literature to identify key challenges and proposed strategies related to resilience and sustainability; and (2) a case study utilizing semi-structured interviews with key industry stakeholders to validate the literature review findings and uncover additional insights not readily accessible through published sources. By jointly examining resilience and sustainability, two objectives often studied in isolation, this study contributes to the cruise operations literature by offering a holistic and integrated framework. Additionally, it contributes to practice by providing actionable guidance for stakeholders aiming to foster an industry that is adaptable to disruption and committed to sustainable development.

Investigating the productivity of airlines in these times is crucial to compare airlines’ performance against peers during a period marked by significant changes in travel demand, operational protocols, and market dynamics. In this study, we present the results of an airline benchmark for the year 2022. Specifically, we collected data for 76 out of 200 largest airlines according to the number of transported passengers in the year 2022. To perform a comprehensive productivity analysis among these airlines, we use eight indicators from the literature, including aggregated ones, such as Total Factor Productivity (TFP) and Residual Total Factor Productivity (RTFP), as well as more specific indicators, such as labor productivity and fuel productivity. As a result of our investigation, we report on the outperforming airlines in two distinct categories: Full-service carriers and low-cost airlines. We believe that this benchmark is a natural complement to existing work on airport benchmarking and will help researchers as well as policy makers to guide airlines towards efficient and sustainable air transportation.

This paper empirically investigates the capacity disruption, operation response, and performance impacts from the grounding of Boeing 737 Max aircraft in March 2019. The three directly impacted U.S. airlines were Southwest Airlines, American Airlines and United Airlines, with varying degrees of reliance on Max aircraft in their respective route networks. First, we assess airline operational responses to the Max grounding based on monthly flight operational data. Then we calculate the impacts of the grounding on revenue, cost and profit at the route level, using panel data for the three affected U.S. airlines during the period from Q3, 2018 to Q4, 2019. To draw inferences about the causal effects from the Max grounding on airline profits, we include three airlines that were not directly impacted by the MAX grounding as a control group and estimate difference-in-differences (DID) models, using propensity score matching methods for a robustness check. Our results show differences in operational adaptation among the three Max airlines in response to the Max grounding. Compared to Southwest and United Airlines, American Airlines was found to be least active in adding flights using non-Max aircraft on affected routes (i.e., where Max aircraft were operated) in responding to the Max grounding. Despite the operational adaptations by the three Max airlines, the DID estimations consistently suggest negative profit impacts from the Max grounding, with impacts positively associated with reliance on Max aircraft prior to the grounding. Finally, we find that profit reductions on Max routes were driven primarily by revenue declines, rather than by cost increases.

PurposeThis study quantifies the impact of technology-enabled delivery platform partnerships on the direct channel sales of restaurant chains.Design/methodology/approachWe leverage a proprietary dataset that tracks expenditures from over 9 million individuals across the USA. The analysis assesses the influence of delivery platform partnerships on direct-channel sales. To identify the causal impact, we use difference-in-difference models with propensity score matching.FindingsOn average, each delivery platform partnership results in a 1.36% increase in physical channel sales and a 42.6% increase in direct, online sales for the restaurant chains' websites and mobile applications. Moreover, our moderation analysis reveals the following: (1) restaurant chains with sparse physical store networks in a market derive greater increases in store sales from delivery platform partnerships than do chains with dense physical networks and (2) deeper channel integration, where restaurants offer delivery options from their own websites (with fulfillment services contracted to delivery platforms), leads to higher online sales from delivery platform partnerships.Practical implicationsThe results suggest that delivery platform partnerships are especially attractive in generating direct-channel revenues for restaurant chains in markets with sparse physical store presence and when customers can access delivery services directly through restaurant chains' websites or applications. This revenue information, combined with a restaurant chain's costs of partnering with delivery platforms, can indicate which markets may be the most profitable for delivery platform partnerships.Originality/valueWe add to segmentation research in logistics by examining how platform partnerships differentially affect two key segments: physical and online direct-sales customers. We extend the channel-capabilities literature by analyzing how a delivery-platform channel, with its distinct search and fulfillment capabilities, reshapes outcomes in the direct sales channels of restaurants. We further contribute to the delivery-platform literature by testing the moderating roles of two operational strategies, physical store presence and direct-fulfillment service, on physical and online sales. Finally, we provide practical guidance: Collaborating with platforms expands, rather than substitutes for, higher-margin direct-channel sales.

This paper estimates the impact of the U.S.-China trade war and the consequent increase in trade costs on air and ocean shipments between the two countries. Using panel data covering U.S. exports and imports with its trading partners from 2016 to 2021, we estimate gravity models and find evidence showing negative impacts of the trade war on both U.S. imports from China and U.S. exports to China. However, there are differential impacts on air shipments and ocean shipments. Specifically, we find that U.S. tariff increases on Chinese goods primarily had a negative effect on air imports from China, whereas China's retaliatory tariffs on U.S. goods mainly had a negative impact on U.S. ocean exports. These findings contribute to the growing body of evidence on the effects of the U.S.-China trade war, highlighting the varying impacts of the trade war on different modes of transportation that drive the U.S.-China trade relationship.

Air transport management research, concerned with all facets of aviation operations, policies, and strategies, is an essential element of making our aviation system more sustainable and preparing it for the challenges inherent to the present and future. Based on a data-driven categorization of almost 2,000 papers published on the subject, we discuss the status quo in air transport management research. Through our data-driven categorization we have identified 15 broad topics. For each topic, we provide a description of the state of the art and propose 2-3 challenges, respectively. Overall, our study provides a set of 35 challenges to the research community. Accordingly, we hope and believe that our study makes a valuable contribution, mainly by guiding the air transport management research community towards a delineated work plan on the research landscape of air transport as well as the present challenges, ultimately helping to improve the global air transport system.

We analyze channel integration between a last-mile delivery platform and a general merchandise retailer in two distinct stages: (1) platform delivery access (PDA), where the retailer continues to offer standard delivery through its own website but directs customers to the platform's website for new same-day delivery; and (2) integrated delivery access (IDA), where customers can continue to use same-day delivery service at the delivery platform website but can purchase products in a single order with both same-day and standard delivery options at the retailer's website. We perform a quasi-experiment using consumer spending data from retailer, target, and delivery platform, Shipt. We find that PDA provides positive impacts to the delivery platform through increased sales. IDA, on the other hand, increases the retailer's online channel sales but does not impact the delivery platform's sales. Moreover, we find that the positive effects of PDA on the delivery platform's sales are stronger in markets where online grocery penetration is lower, indicating that the effects were likely driven by increased purchases for groceries. Finally, the positive effect of IDA on the retailer's online channel sales is stronger in markets where the retailer has a greater loyal customer base and online grocery penetration is lower.

PurposeAs ecommerce becomes more prevalent, traditional brick-and-mortar retailers such as warehouse clubs (WCs) face the challenging task of maintaining and growing their customer base. This study aims to unravel the combined impact of retail agglomeration and ecommerce activities on consumer foot traffic (also referred to as "footprint") at WC stores, placing an emphasis on the locational strategies adopted by WCs in this evolving retail landscape.Design/methodology/approachMobile-based customer foot traffic data for Costco, a major U.S. WC chain, is sourced for our analysis. We use Principal Component Analysis (PCA) to identify dimensions of general merchandise (GM) and narrow-range merchandise (NM) retail agglomeration. Two-stage least squares (2SLS) regressions are used to explore how the intensity of ecommerce activities and WC locational choices within retail agglomerations impact WC foot traffic.FindingsOur analysis highlights a notable decline in WC store visits attributable to both GM and NM ecommerce activities, with GM ecommerce presenting a more significant competitive challenge to WCs. Regarding retail agglomerations, proximity to GM clusters that include a diverse range of supercenters, department stores, and club stores, is associated with an increase in WC customer visits within their vicinity. In contrast, the influence of NM agglomerations is mixed; clusters adjacent to grocery stores lead to higher WC customer traffic compared to those focused on other specialized stores. These findings underscore the strategic importance of location in mitigating the adverse effects of ecommerce competition. Additionally, our study uncovers intricate dynamics between GM and NM retail clusters and ecommerce activities, demonstrating varied impacts on WC customer footprint.Research limitations/implicationsAccess to customer footprint data illustrates the potential of this data source for retail decision making and researchers. Our analysis is limited to one chain, notably Costco.Practical implicationsOur findings underscore the need for retailers to adeptly navigate the evolving retail landscape, including the confluence between physical and digital retail environments, to secure future success. In particular, our results emphasize the benefits of locating stores within mixed retail agglomerations and underline the need to consider the broader retail landscape in location decisions.Social implicationsThe rise of ecommerce in the U.S. has reshaped consumer behavior and altered local shopping districts' communal dynamics. This change may spur policy interventions to help physical stores compete with online retailers, emphasizing the importance of retail diversity and community-centric environments to sustain communal retail interactions amidst digital advancements.Originality/valueThe paper makes use of a unique dataset to provide a first assessment of the combined effects of retail agglomeration and ecommerce activities on consumer foot traffic for WC retailers. Thus, this paper provides insights into the impacts on consumer shopping behavior from the dynamic interactions between physical retail clusters and online shopping behaviors.

This paper investigates the impact of Open Skies agreements on airfares and passenger traffic on gateway-to-gateway routes between the United States and other countries, given the presence of global alliances. The conventional wisdom is for Open Skies agreements to contribute to lower fares and higher passenger traffic. However, the U.S. and some of its open skies partners grant airline alliances antitrust exemptions. These exemptions could lead to higher fares and reduced passenger volumes on routes covered by Open Skies agreements. Therefore, the net effect of Open Skies agreements is uncertain, a priori. Using panel data covering over 1,000 U.S. international routes during the 2015-2019 period, we find empirical evidence at both route and country levels suggesting that Open Skies agreements do lead to lower discount economy fares and to higher passenger traffic, despite the presence of global alliances.

This study investigates the influence of pandemic experiences on consumer behavior and retail operations, focusing on hand sanitizer during eight seasonal flu epidemics and the swine flu pandemic, covering the period from 2008 to 2017. Motivated by the need to understand the pandemic's impact on retail dynamics, this study fills a gap in knowledge about consumer and retailer adjustments in response to health crises. Using an empirical analysis of data from 38,000 U.S. stores, the results show that both consumers and retailers appear to learn from their pandemic experiences. Consumers respond by substituting large pack sizes for small pack sizes of sanitizer, while retailers carry larger assortments of sanitizer products. Moreover, it is noted that the strategies employed by warehouse clubs and drug store chains—stocking large pack sizes and stocking wide assortments of hand sanitizer, respectively—are both attractive to consumers. Finally, the results show that sanitizer sales patterns during the swine flu pandemic were similar to those during the early phases of the COVID-19 pandemic, indicated that lessons learned from one pandemic may be carried forward to subsequent pandemics. These findings contribute to the literature on retail management and consumer behavior during health emergencies, offering valuable insights for future pandemic preparedness.

PurposeThe study focuses on (1) the success of three strategies employed during the pandemic – two “persevering” strategies, curbside pickup and return window extension and one innovative strategy, virtual try-on technology and (2) whether the strategies are likely to be successful in the post-pandemic world.Design/methodology/approachThe authors utilize a panel dataset containing 17 department store chains in the US The panel includes weekly sales by the retailers at the city level from 2018 to 2021, encompassing both a pre-COVID-19 period and a period during the pandemic. A two-way fixed effects model, including retailer-city fixed effects and year-week fixed effects, is used to estimate department store sales.FindingsThe authors find that the two persevering strategies offset the negative impact of government-imposed containment and health measures on sales performance. On the other hand, the innovative strategy is more effective with a low level of containment and health measures, leading to our observation that virtual try-on may be more sustainable than the other two strategies in a post-pandemic environment.Originality/valueThis paper makes the following contributions: First, the authors contribute to the literature on strategies that may be used to respond to crises. Second, the authors contribute to the retail management literature, assessing the impact of the three retail strategies on department store sales. Finally, the authors compare the impact on sales of the two persevering strategies to the innovative strategy and conclude that a mix of these types of strategies may be most effective at generating short-term sales during a crisis and longer-term sales post crisis.

An examination is conducted of airline strategies during the covid-19 pandemic using data from the United States. Our findings show that airlines pursued diverse strategies in terms of route entry and retention, pricing, and load factors. At the route level, a more detailed examination is conducted of the performance of a middle-seat blocking strategy designed to increase the safety of air travel. We show that this strategy (i.e., not making middle seats available to passengers) likely resulted in revenue losses for carriers, an estimated US $3,300 per flight. This revenue loss provides an indication as to why the middle seat blocking strategy was discontinued by all US airlines despite ongoing safety concerns.

This study examines the impacts of consumer confidence on stockpiling behavior and, subsequently, retail inventory management. We show how stockpiling behavior evolved during the "Great Recession" of 2008-2009 as consumer confidence waned and demonstrate the impact of this development on inventory management. Drawing on the two-segment household inventory theory consisting of nonstockpiling and stockpiling segments, we use a panel dataset (2005-2015) to calibrate household inventory holdings. This dataset then serves as input for a retailer-level case study. Our empirical analysis reveals significant impacts from changing stockpiling behavior. When consumer confidence is low, both stockpiling and nonstockpiling segments respond by reducing weekly consumption rates; however, the stockpiling segment also significantly lengthens the time between shopping trips, and ultimately increases the duration of inventory holdings. These changes to consumption and stockpiling add complexity to inventory planning, requiring retailers to carefully adjust inventory levels to maintain service levels.

Download This Paper Open PDF in Browser Add Paper to My Library Share: Permalink Using these links will ensure access to this page indefinitely Copy URL Copy DOI

Purpose Based on cost of quality (CoQ) research, this study aims to highlight the importance of incorporating the costs to customers in contributing to service quality when examining how customers respond to possible service failures [quality assurance behavior (QAB)]. Consequently, this study also aims to show how the CoQ framework can be a useful tool to the service industry in determining enhancements in quality and related expenditures. Design/methodology/approach Using the airline industry as a case example, this study empirically tests the impact of predicted service quality and its associated costs on an individual's QAB (wait time spent at the departing airport) through revealed preferences. The study uses survey data from more than 4,000 passengers matched with travel-specific quality information archived by the US Department of Transportation (DOT). Findings This study finds that customers are willing to increase their level of QAB when informed of an increased probability of service failure. This study also finds that the level of QAB varies depending on anticipated customer costs of avoiding or responding to service failures. Practical implications Findings of this study emphasize the need for shared responsibility between service providers and their customers in making decisions on the provision of service quality, as helping customers adjust the appropriate level of QAB may result in greater efficiency and higher quality of service. Originality/value This study conceptualizes and empirically tests causal relationships between expected quality and customer efforts (QAB), thus contributing to operations literature examining CoQ in a service setting. This study argues that it is critical to consider shared responsibilities between co-producers (service providers and customers) in service operations studies.