China’s “ONE BELT ONE ROAD” project will encourageinvestments in transportation, trade, energy and mining,eventually resulting in strengthened regional cooperation, improved economic growth, trade diversification and political flexibility (Peter Ferdinand, 2015). china will invest $46 billion in China-Pakistan economic corridor and the completion of this mega project will pull foreign investment and hence promote logistics, energy, and resources, information flow exchange between two countries (Dong et al. 2016).
The project will link Chinese city Kashgar and Pakistani sea port Gawadarthrough railways, highways and pipelines, thus, facilitating trade along overland route. However, security issues and political instability in Pakistan pose real threats to the project implementation (S. Markey et al. 2016). These catastrophic risksalso impact logistics performance of the entities and hence results in economic losses (M. Wagner et al. 2008).
Moreover, logistics performance is characterized by logistics efficiency, effectiveness and differentiation (S. Fugate et al. 2010). Government support and environmental uncertainties would force commercial entities to differentiate their logistic services and offer innovative solutions (Chieh-Yu Lin, 2007).Pakistani civil and military leadership have shown serious concerns towards the success of CPEC project and tender full support because the project is linked to economic, political and security opportunities (S. Markey et al. 2016).
Past studies have explored into the role of external factors to logistics innovation (Chieh-Yu Lin, 2007), relationship of logistics innovation with logistics performance (S. Fugate et al. 2010) and examination of logistics performance along with several risk dimensions (M. Wagner et al.
2008). However, the current study will investigate into impacts of Govt. support and environmental uncertainties on logistics innovation and eventually on logistics performance of 3PL logistics companies.
The study will also shed light as if terrorism and political instability can affect the logistics performance of these companies. “ONE BELT ONE ROAD” Project of china is aimed at linking several countries across Asia, Africa, Europe and Middle-East(A. Ashfaq et al. 2015, S. Markey et al. 2016).
All the countries globally are facing critical issues linked to political instability and terrorism since 9/11. Therefore, the results of the study will have wider significance for the managers not only in Pakistan but also across the world. If the proposed model stands true, 3PL companies should seek greater support from civil-military leadership for better logistics performance.
The research will also add new dimension to the existing theory by confirming the impact of terrorism and political instability on logistics performance of 3PL companies operating in similar scenarios.