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Understanding the usage patterns, practices and decision process of third party logistics outsourcing in Bangladesh

Nasrin Akter (Department of Marketing, University of Dhaka, Dhaka, Bangladesh)
Prem Chhetri (School of Business IT and Logistics, Royal Melbourne Institute of Technology, Melbourne, Australia)
Shams Rahman (Business IT and Logistics, Royal Melbourne Institute of Technology, Melbourne, Australia)

Journal of Global Operations and Strategic Sourcing

ISSN: 2398-5364

Article publication date: 29 August 2019

Issue publication date: 23 October 2019

500

Abstract

Purpose

Bangladesh is becoming one of the emerging destinations for global outsourcing. However, little is known about the usage patterns of third party logistics (3PL) outsourced services. The purpose of this paper is to examine the extent of 3PL usage, the organisational factors affecting 3PL usage, impacts of 3PL and the future trend of 3PL usage in Bangladesh.

Design/methodology/approach

A survey questionnaire is used to collect data against a number of items pertaining to the extent of 3PL use and its impact on performance. A total of 1,000 organizations were randomly selected from the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) database. The survey resulted in 243 responses, out of which 150 organisations have adopted 3PL services. A chi-square test is conducted to assess statistical significance of the hypothesized relationships among the variables relating to 3PL decision-making process and a regression analysis is conducted to assess the strength of those variables to predict the impact of 3PL usage.

Findings

Overall, the results reveal that 3PL services are extensively adopted by businesses (63 per cent) in Bangladesh. Freight forwarding, order fulfilment and shipment consolidation are the top three most frequently outsourced 3PL services. However, the extent of 3PL use varies between manufacturing and service organisations. Results also suggest that logistics system performance is the key predictor of the overall satisfaction of 3PL users.

Research limitations/implications

The key limitation of this study is that both manufacturing and services firms are collectively analysed. Future research will separately investigate the outsourcing 3PL services requirements for two categories of firms. Characterisation of 3PL usage patterns and their drivers has practical significance and strategic implications for logistics practitioners and decision-makers who opt for global outsourcing.

Originality/value

The implementation in the context of Bangladesh to provide an evidence base to formulate business strategies for increasing the adoption of 3PL usage is novel.

Keywords

Citation

Akter, N., Chhetri, P. and Rahman, S. (2019), "Understanding the usage patterns, practices and decision process of third party logistics outsourcing in Bangladesh", Journal of Global Operations and Strategic Sourcing, Vol. 12 No. 3, pp. 329-354. https://doi.org/10.1108/JGOSS-08-2018-0027

Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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