Determinants of Competitive Performance in the Indonesian Freight Forwarding Industry: Integration, Embeddedness, and Innovation

The global logistics industry is transforming operational functions into strategic capabilities to create competitive advantage. However, rapid market growth in Indonesia has not been fully matched by adequate organizational capabilities, leading to the "fragmented capability" phenomenon that hinders firm competitiveness. This study aims to analyze how supply chain integration, digital logistics, and network embeddedness simultaneously influence innovation performance and competitive performance in Indonesian freight forwarding companies. This study employs a quantitative explanatory research design involving 201 respondents in managerial positions, selected through purposive sampling. Data analysis was conducted using a Structural Equation Modeling approach based on Partial Least Squares. The research results show that supply chain integration and network embeddedness significantly improve innovation performance, and that network embeddedness and innovation performance directly enhance competitive performance. Conversely, supply chain integration has no significant direct influence on competitive performance, indicating that its role is more of a supporting capability that must be transformed through innovation. This study concludes that competitive advantage is determined not only by operational integration but by the organization's ability to convert those capabilities into valuable innovations. Companies are advised to prioritize strengthening innovation and strategic partnerships to increase access to market opportunities.