The impact of third-party logistics performance on the logistics and export performance of users: An empirical study

Third-party logistics (3PL) denotes ‘a relationship between a shipper and third party which, compared with basic services, has more customised offerings, encompasses a broader number of service functions and is characterised by a longer-term, more mutually beneficial relationship’. Previous studies on 3PL generally fall into two categories. The first group examines the willingness of shippers (users), and the respective benefits and costs to them, of using 3PL services, whereas the second group concentrates on devising winning strategies for 3PL providers to better fulfil the requirements of users. This paper attempts to provide new insights on the relationship between 3PL providers and shippers by examining the impact of the performance of 3PL service providers on the user logistics and export performance of manufacturers and traders in Hong Kong. The results reveal that the timeliness of the service; pricing; and the quality of delivery of 3PL service providers are positively related to the users’ logistics and/or export performance. However, performance in customised supplementary services is not related to any aspect of the users’ logistics or export performance. The overall findings suggest that users should focus primarily on the timeliness of 3PL services, followed by the quality of delivery and pricing when selecting service providers. On the other hand, 3PL service providers are advised to focus primarily on core logistics activities, that is timely deliveries and quality handling at reasonable prices, and to downplay offerings of customised supplementary services unless they are engaged in long-term relationships with the users. © 2006 Palgrave Macmillan Ltd. All rights reserved.