Major Factors Influencing the Performance of Local Private Third Party Logistics Service Providers in southern China

Abstract

The increase in foreign trade that resulted from China’s membership of the World Trade Organization (WTO) created substantial pressure on its logistics system and made change inevitable for local private third party logistics service providers (3PLs) in China who found themselves unable to compete with the global logistics players who began operating in China after it joined the WTO. This study provides an empirically-based model to help local private 3PLs formulate appropriate strategies for improving their performance. Although there is a plethora of literature relating to the improvement of organizational performance and the development of quality management models, most of the studies have been conducted in Western countries and used only one or two organizational performance variables. This study sought to redress that by conducting a study of local 3PLs in southern China to empirically investigate the relationship between the four performance variables of the Balanced Scorecard and the six quality management factors developed for the Malcolm Baldrige National Quality Award. Southern. Although it was found that the six factors have a strong relationship with the four organizational performance variables, not all factors are significant constructs to each performance variable. The findings provide local private 3PLs in China with indicators as to which factors do and which factors do not have a positive and significant effect on each of the four organizational performance variables considered. The study clearly shows that performance improvement should not be considered from the financial perspective alone, but should also include customer orientation, business process, and learning and growth.