What Makes Logistics Integration More Effective? Governance from Contractual and Relational Perspectives

Third-party logistics (3PL) user-provider integration is attracting increasing attention from both academics and practitioners. However, it remains unclear how best to adopt governance mechanisms to safeguard 3PL user-provider integration (e.g., information sharing and process coordination). Based on transaction cost economics and social exchange theory, this study examined the individual and joint effects of contractual (e.g., detailed contracts and contract application) and relational governance (e.g., trust and relational norms) on 3PL user-provider integration for operational performance. We conducted a survey involving 247 3PL service users and analyzed the conceptual model using the method of structural equation modeling. The results showed that process coordination improved operational performance, while information sharing alone did not significantly improve operational performance but complemented the role of process coordination in improving operational performance. In addition, having detailed contracts was positively related to process coordination, while contract application was positively related to information sharing. Trust was not significantly related to information sharing or process coordination, while relational norms were positively related to both. Finally, three joint effects on 3PL user-provider integration were found. Two of them were substitutional (detailed contracts and relational norms; contract application and trust), and one was complementary (detailed contracts and trust). This study makes several theoretical contributions and provides novel guidelines for 3PL relationship development.