Third-party purchase: An empirical study of third-party logistics providers in China

Third-party purchase (3PP) is an emerging value-added service offered by third-party logistics (3PL) providers. In this paper we first present a real-life 3PP service model to illustrate 3PP's innovative aspect. We then develop a conceptual model grounded in multiple theories to probe the value propositions of 3PP. We apply structural equation modeling to test the conceptual model based on the survey data from 245 Chinese 3PL providers. We find that, from the perspective of 3PL providers, uncertainty, order frequency, and transaction size, but not asset specificity, are significantly associated with 3PP service, which in turn is significantly associated with value-to-client and benefit-to-3PL provider. Existing studies have focused on investigating the basic services offered by 3PL providers using transaction cost analysis. This study provides evidence that 3PP is a new value-added service that will generate mutual benefits for both 3PL providers and users.