An Investigation into critical challenges for multinational third-party logistics providers operating in China

The entry of the multinational third-party logistics (MN3PL) service providers in China has a far-reaching impact on the development of the Chinese logistics industry. However, while delivering services, MN3PLs experience several challenges which are crucial to identify and address for further improvement of their service delivery. This study aims to identify and prioritise these challenges for strategic importance of MN3PLs operating in China. Through an extensive literature review of 3PL research fourteen challenges for MN3PLs are identified and a theoretical underpinning relative to these challenges is provided. The analytic hierarchy process (AHP) approach is employed to assess the criticality of challenges. Five executives from five large MN3PLs are invited to participate in this study. Results indicate that the most critical challenges confronted by the MN3PLs are guanxi, government regulations, price pressure, and transportation cost. To remain competitive MN3PLs must build guanxi networks with key stakeholders and minimize cost of delivery.