A comparative study on the use of third party logistics services by Singaporean and Malaysian firms

Purpose – The aim of this research is to undertake a comparative analysis on the use of third party logistics (3PL) services by manufacturing firms in Singapore and Malaysia. Design/methodology/approach – This study is based on a questionnaire survey conducted in Singapore and Malaysia in 1998 and 2000, respectively. The paper addresses key issues relating to the extent of usage of 3PL services, specific contract logistics services used, benefits for the user firms, obstacles encountered in implementing contract logistics relationships, impact of the use of contract logistics services on logistics costs, customer satisfaction, and employees of the user firms and the future plans of current users of contract logistics services. Findings – Analysis shows that there are similarities on the use of contract logistics services in Singapore and Malaysia. These include the proportion of firms utilising contract logistics, the extent of involvement of functional managers, budget allocation and activities outsourced. Notable differences between the two countries include the decision‐making process, and the benefits to the firms from the use of contract logistics. Research limitations/implications – Limited sample size and the generalisation of results to all manufacturing firms in Singapore and Malaysia manufacturers ignoring possible regional differences in each context are the two limitations in this study. Originality/value – This study identifies the scope for 3PL services in Singapore and Malaysia. With the enhanced usage of contracting logistics, the study provides 3PL services providers who are considering Asia Pacific as a potential market, a comprehensive analysis of the current situation in Singapore and Malaysia.