Track: Supply Chain and Logistic Competition

Abstract

Third-party logistics (3PL) is an essential player in satisfying the needs of the growing online retail industry. The growing competition in this industry necessitates the demand for 3PL companies to provide fast, reliable, and cost-efficient services to satisfy their customers' needs. This study illustrated the role of 3PL service providers and measured their actual performance in servicing the online retailing sector in the Philippines. Data from four (4) 3PL companies operating in the country were obtained and evaluated based on several criteria or factors such as cost of service, quality of service in terms of on-time delivery, quality of service in terms of errors, quality of service in terms of cost of damages, long-term relationships, flexibility in billing, delivery performance, information technology (IT) capacity, product rating, fixed asset, and market share. Using the analytical hierarchy procedure (AHP), the importance weights of each factor were calculated. Results indicated that the cost of service is considered by the 3PL companies as the most crucial factor, posting the highest importance weight of 0.31. On the other hand, the least important factor, obtaining the lowest importance of 0.01, is fixed asset. 3PL companies are encouraged to revisit their costing strategy to ensure competitiveness and relevance in the logistics industry. They must also improve the quality of service to maintain the customers and build long-term relationships.