State of third party logistics providers in China
Abstract
Purpose
The purpose of this paper is to identify global trends in the third-party logistics (3PL) industry, and with that to find out where the opportunities and challenges lie, what the critical success factors are, and how companies can position themselves well in China. As there is currently very limited knowledge about the 3PL industry in China, this study also intends to shed light in this area.
Design/methodology/approach
The study is conducted through focus group interviews with senior executives of leading 3PL companies in China followed by a survey with 70 logistics companies.
Findings
The key strengths of the logistics industry in China include numerous factors such as good connectivity and new infrastructure, while its main weaknesses are a shortage of qualified staff and slow adoption of technologies. There are a number of concerns and issues raised, such as lack of qualified staff, oversupply of warehousing space in China, competition from the influx of foreign 3PL companies to China, and regulations on free trade zones, seaports and airports, all of which may have policy implications.
Research limitations/implications
As most of the logistics companies in the study are located and dominating in the Eastern and Southern China, it may be useful to conduct similar study in the new emerging western and central regions of China for comparison.
Practical implications
Managers and investors will appreciate the challenges and opportunities in logistics services in China and have a better insight into Chinese logistics development.
Originality/value
While China has been viewed as a cost effective place for manufacturing, the logistical costs in China are still very high as compared to other developed countries. This research will highlight the key reasons for the high logistical cost in China.
Keywords
Acknowledgements
The authors would like to state sincere thanks for the companies, which participated and contributed in this research work. This manuscript also significantly benefitted from the review process of the journal, and authors hold gratitude for anonymous referees concerning their remarks and improvement points.
Citation
Wee Kwan Tan, A., Yifei, Z., Zhang, D. and Hilmola, O.-P. (2014), "State of third party logistics providers in China", Industrial Management & Data Systems, Vol. 114 No. 9, pp. 1322-1343. https://doi.org/10.1108/IMDS-06-2014-0179
Publisher
:Emerald Group Publishing Limited
Copyright © 2014, Emerald Group Publishing Limited