Third party logistics development : An investigation of factors influencing third party logistics companies’ success in China based on two case studies

Abstract: China has undergone rapid economic development. The growth has led to rapid development of logistics industries, especially the third party logistics (3PL) business. Many international 3PL companies have entered this market. Although some Chinese 3PL companies have used information technologies to effectively improve their financial performance, most of Chinese local providers are not competitive enough to increase their market share. With the increasing fierce competition, it is not enough for the Chinese 3PL companies to focus on cost, but also to improve their operational performance and added values. Therefore, it is important for these companies to learn from some competitive and successful companies so that they can explore a way to develop their business. This study focuses on two successful 3PL companies in China and explores the factors influencing these companies’ success. They are Anji logistics and APL logistics. Through conducting secondary and interview research, it is found that the first one has cost advantages and the second one has value advantages. Information technology systems and at least one competitive operations performance are both important to these companies’ success. Besides that, it is found that Anji Logistics’ success is also related to strategic alliance, while APL Logistics’ success is also related to customer service and human resource. These two companies should learn from each other because the industry will become more intensively competitive and both cost and value advantages are important to the success in the future.