Transport Management Technologies and Performance of Third Party Logistics Providers in Kenya

Abstract

The aim of this study was to establish the link between transport management technologies and performance of third party logistics (3PL) providers in Kenya. The study was guided by two specific objectives; to identify the extent to which transport management technologies are adopted by 3PL Providers in Kenya and establish the effect of transport management technologies on performance of 3PL Providers in Kenya. The study adopted cross sectional survey research design. The population of the study comprised of 1,121 logistics companies operating in Kenya and the target population were logistics officers in each of the firms. Stratified random sampling procedure was adopted to identify the sample for the study. These strata were based on Nairobi, Mombasa and other regions. The expected sample size for the study was 340 respondents but actual sample size was 191 respondents. The study relied on primary data collection which was done using a questionnaire. The questionnaire was administered through phone and email techniques due to the geographical location of the targeted organizations. Descriptive and correlation analysis was done to analyse the data using SPSS. The findings show 53.0 % of logistic firms were in Nairobi, 30.2 % in Mombasa and 16.8 % in other major towns such as Nakuru, Eldoret and Kisumu. Fifty seven percent were male respondents and female accounted for 43.4 %. The results revealed that 31.8 % were 26-35 years, 30.2% were 36-45 years, 16.3 % were 18-25 years, 14.7 % were 46-55 years, and 0.7 % were 56 and above. Forty four percent of firms had been in operation between 2-5 years and 12.4 % had operated for less than 2 years. The findings revealed that GPS was the most used IT tool with 55.8 % indicating that their firms used GPS to a very great extent followed by Bar-coding technology and Warehouse Management Systems. The results indicated that improved communication was the most significant effect of transport management technologies followed by reduced costs of operation and improved productivity. The study concluded that GPS was the most adopted transport management information technology among 3PL providers in Kenya and improved communication as the greatest effect of adopting transport management technologies. The study concludes that there was a positive and significant relationship between intelligent transport systems, telecommunication and information technology and performance of 3PL service providers. Based on the findings, the study recommends that 3PL providers in Kenya should evaluate their information technologies strategies to identify which transport management technologies are most crucial to their operations. Such an evaluation would enable 3PL providers to invest in transport management technologies that lead to maximum optimization of their operations, and that 3PL providers should invest in transport management technologies that provide available, accessible, and timely information in every stage of the supply chain. This would contribute to improved performance of the firm in an industry that relies on information and communication with clients.