DRIVERS FOR THE SATISFACTION OF THIRD-PARTY LOGISTICS CUSTOMERS IN SRI LANKA: MANUFACTURERS’ PERSPECTIVE

Abstract

The Asia Pacific region is the world's largest Third-party logistics (3PL) market and the fastest-growing. Sri Lanka is placed 94th out of 160 countries in the World Bank's Logistics Performance Indicator (LPI) for 2018, indicating a need to enhance the quality of its logistics services. One aspect that might help to improve the quality of logistics services is the performance of 3PL service providers. The paucity of studies in this area has magnified the need for more studies. Accordingly, the key objective here is to figure out the main drivers for customer satisfaction in 3PL market in Sri Lanka. The study used the systematic literature review and expert opinions to identify the drivers for 3PL market in Sri Lanka. Quantitative methodology was applied, where 130 registered logistics companies in Sri Lanka were chosen as the sample using the purposive sampling technique. A structured questionnaire was used to collect data, and data were analyzed using factor analysis. Accordingly, seven factors (service quality, mutual trust, IT capability, flexibility, service recovery, reputation of 3PL providers, and information sharing) have been explored, which can explain about 61% of the variance among indicators. Further, Pearson correlation and linear regression analysis were used to analyze the data by SPSS. Results indicate that the reputation of 3PL providers, information sharing, and service quality are the significant drivers on 3PL market, whereas IT capability, service recovery, and flexibility are insignificant drivers. It is commonly accepted that local firms may improve their international competitiveness by utilizing logistics to create value, and findings of this study would be beneficial for such an objective.