FACTORS AFFECTING THE SATISFACTION OF THIRD PARTY LOGISTICS (3PL) CUSTOMERS IN THE APPAREL SECTOR IN SRI LANKA.

As an emerging industry, logistics plays a significant role by providing a helping hand for firms in achieving competitive edge over rivals. Maximizing profits through integrated partnerships is one of the primary objectives of both 3PL providers and their customers when dealing with outsourcing logistics activities. A rapid increase is visible in the number of companies that outsource their logistics activities to 3PL providers. Apparel firms in Sri Lanka have the highest interest in outsourcing logistics activities compared to other industries. However, lack of proper identification and fulfilment of customer requirements, which has ultimately resulted a negative perception in the minds of customers towards their 3PL providers, is a burning issue in this industry. The present study addresses this issue by identifying the factors affecting the satisfaction of 3PL customers in the apparel industry in Sri Lanka. Primary data were collected using a semi-structured questionnaire from a random sample of 56 apparel firms. Trust, flexibility, effective communication, openness & transparency, effective partnering & collaboration, financial considerations, condition fulfilment, and customer relationships, were considered as the factors influencing 3PL customer satisfaction in apparel sector in Sri Lanka. 3PL customer satisfaction was viewed on two dimensions, namely, switching behaviour and customer loyalty. It revealed that all selected independent variables have positive significant relationship with customer satisfaction, while flexibility of the 3PL provider was the most significant factor that influences customer satisfaction