Institute of Transportation, MOTC

Chih-huai Lin ，2007.01
Graduate Institute of Traffic and Transportation Engineering and Management
Feng Chia University

　　Logistics outsourcing has been extensively used by various companies attempting to achieve cost reduction and gain competitive edge. The objective of this study is to investigate how high-tech manufacturers choose appropriate third party logistics (3PL) providers which offer various logistics services such as transportation, warehouse and information technology. Factor analysis is initially employed to reduce a large number of service quality variables related to 3PL providers into few factors. Due to a large number of forwarder-based 3PL providers available to manufacturers, the forwarders are classified into three groups –Taiwan-based international forwarders, Global logistics forwarders and Taiwan-based local forwarders by using cluster analysis. Finally, various discrete choice models are used to identify important variables affecting the choice of 3PL providers and to explore substitution patterns among 3PL providers. The survey was conducted to high-tech manufacturers in Hsinchu and Southern Taiwan Science Park. The estimation results of multinomial logit models reveal that the important determinants influencing the selection of 3PL providers consist of performance, cost, response, and shipment weight. The preferred nested logit model includes the choice of 3PL category (express-based versus forwarder-based) at the upper level and the choice of specific 3PL providers in each category at the lower level, indicating that substitution patterns among 3PL providers in each category is high. The estimation results of mixed logit models further indicates that high-tech manufacturers have unobserved heterogeneity in performance of forwarder-based 3PL. The firms with large shipment weights and high-capital are sensitive to cost and response. Besides, high-capital firms prefer to choose the express-based 3PL than the forwarder-based 3PL due to the performance. The results provide valuable insights for the 3PL providers to enhance their services performance.