Abstract 

The international markets of third party logistics (3PL) are quitecompetitive. Most 3PL providers offer some basic services, such astransportation and warehousing services, but rarely perform value-added activities. 

The primary purpose of this research will focus on third party purchase(3PP)asvalue-added service by third party logistics providers. 3PL providers shouldexpand their services in order to keep a competitive advantage, and 3PP is aviable alternative to achieve this. The business operations of 3PL providers ofChina and New Zealand are quite different. Many Chinese local 3PL providers areunaware of adding value to their services because they primarily provide onlybasic services (transportation and warehousing). The level of usage of 3PL isquite low in New Zealand compared to that of Europe and North America. Thebenefits from outsourcing are not large enough for either the client or the 3PLprovider. Moreover, from a buyer’s perspective, both countries’ small- and medium- size enterprises (SMEs)are struggling for lower purchasing price due to small purchasing powerand order quantity. With a large amount of both countries’ trade increasing,the purchasing issue will become a primary challenge for those SMEs. 

This paper outlines a research proposal to through light on the competitiveadvantages to 3PL providers by using third party purchase. It is expected to bebeneficial for 3PL providers and valuable for their clients. In addition, theresearch will illuminate that SMEs will receive more benefits through using third-party purchase. 

1.0 Introduction 

Third party logistics(3PL), also referred to as ‘logistics outsourcing’ or ‘contract logistics’, hasbeen growing quickly during the past decade. Africk and Calkins (1994) define3PL as ‘a relationship between a shipper and third party, which, compared withbasic services, has more customized offerings, encompasses a broader number ofservice functions, and it's characterized by a longer-term, more mutuallybeneficial relationship’ (pp. 49-61). For buyers and sellers, it is necessaryto build the long-term interactive relationships that have been identified asthe crucial benefits. 

Zhang and Keith (2001)point out that Chinese logistics providers should attempt to expand theirservices, such as providing a purchasing service. Hong et al. (2004) suggeststhat an important issue facing Chinese 3PL providers is the lack of a conceptof providing entire logistics services. In addition, state-owned logisticsfirms provide some basic services, such as transportation and warehousingservices, but rarely perform value-added activities (Powers, 2001). Inparticular, the poor performance of local suppliers and the unavailability ofservices is becoming a major obstacle in creating an efficient logistics systemneeded to bolster China’s 3PL development (Carter et al., 1997). Most of thesefirms are not aware that they need to provide a value-added service, nor thatlogistics users would be prepared to pay for such a service.