The competitiveness of logistics providers invested by liner companies vs global 3rd party logistics providers (commercial and economical aspects)
With globalisation and changing customer demand, logistics has become increasingly important in the management of global business, playing a fundamental role in the enhancement of many firms’ profitability. In recent years, the logistics industry’s total addressable market has grown significantly, a...
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| Format: | Final Year Project |
| Language: | English |
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Nanyang Technological University
2021
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| Online Access: | https://hdl.handle.net/10356/150204 |
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| Institution: | Nanyang Technological University |
| Language: | English |
| Summary: | With globalisation and changing customer demand, logistics has become increasingly important in the management of global business, playing a fundamental role in the enhancement of many firms’ profitability. In recent years, the logistics industry’s total addressable market has grown significantly, and is expected to continue growing rapidly, being supported by global trends such as e-commerce, infrastructure, information technology advancement etc. This study aims to examine which of the following aspects – Economic or Commercial, have the greatest impact on the competitiveness of Global Third-Party Logistics (3PLs), and Logistics Service Providers (LSPs) invested by liner companies. The report also aims to rank and identify whether Global 3PLs, or LSPs invested by liner companies, is more competitive in the market. We will also be analyzing the competitiveness of the Top 5 Global 3PLs as well as the Top 5 Logistics Service Providers (LSPs) invested by liner/container shipping companies as a logistics arm. Through literature review, key success factors of economic and commercial aspects were identified. Using surveys and a modified Competitive Strength Assessment to calculate the importance weight, strength rating as well as the weighted score for various aspects, the study’s results allowed us to understand the strengths and competitiveness of each category of service providers. The report’s findings showed that in the commercial aspect, customer satisfaction is one of the more important factors influencing shipper’s decisions in selecting logistics providers. For the economic aspect, shippers were also found to have taken note to the Free Cash Flow (FCF) and Debt-to-equity ratios when evaluating logistics providers. It was also concluded that in terms of the overall industry dynamics recently, Logistics Providers invested by liners were found to be generally more competitive in the market in both commercial and economic aspects, while the various key success factors of the commercial aspect were also discovered to be important competitiveness criteria for shippers. Recommendations to improve each category of LSPs were also discussed – (1) keep improving on the strengths to maintain a strong competitive advantage over their rivals, (2) work on the key success factors with the largest rating gaps in terms of strength rating and lastly (3) focus on the key success factor with the highest importance weight rating. Furthermore, practical recommendations to work on enhancing both the Commercial and Economical Aspects of both Group A (invested by liner companies) and Group B (Global Third- Party Logistics) logistics providers were also discussed. |
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