Shuen Mei, 2006.08
Feng Chia University - Graduate Institute of Traffic and Transportation Engineering and Management
Logistics outsourcing is widely adopted by many companies around the world. Selection of appropriate third party logistics (3PL) providers which offer various logistics services such as transportation, warehouse and information technology is a crucial task for companies which aim to achieve cost reduction and gain competitive edge. This research combines exploratory factor analysis (EFA) and discrete choice modeling approach to examine the choice of 3PL providers. EFA was initially employed to reduce a large number of variables into few factors (constructs). The multinomial logit and nested logit model were then used to identify important variables influencing the selection of 3PL providers. Revealed preference questionnaires were designed and forwarded to manufacturers located in the Taichung areas. The estimation results of the multinomial logit model indicate that average shipment frequency and three latent construct (cost, services performance and response) are significant variables influencing selection of 3PL providers. The nested logit model further identifies that global forwarders and some express-based carriers are highly substituted. The results provide valuable implications for 3PL providers to improve their services and market shares.
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