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The Development of Third Party Logistics in Malaysia: An Overview by Salina binti Umar Submitted to the Department of Transportation in Partial Fulfillment of the requirements for the Degree of Master of Science in Transportation and Logistics at the Malaysia University of Science and Technology September 2004 © 2004 Salina binti Umar All rights reserved The author hereby grants to MUST permission to reproduce and to distribute publicly paper and electronic copies of this thesis document in whole or in part.

Signature of Author __________________________________________________________ Department of Transportation August 2004 Certified by ____________________________________________________________

__ Dr. Leong Choon Heng Department of Transportation Thesis Supervisor ____________________________________________________________

___ Niranjan Krishnan Department of Transportation Assigned Examiner Accepted by ____________________________________________________________

____ Dr. Leong Choon Heng Department of Transportation Head of MSc Transportation and Logistics

The Development of Third Party Logistics in Malaysia: An Overview By Salina binti Umar Submitted to the Department of Transportation and Logistics in Partial Fulfillment of the requirements for the Degree of Master of Science in Transportation and Logistics Abstract The main objective of this thesis is to study the progress of local third party logistics (3PL) providers and analyze its development in Malaysia. The study takes into account the increasing demand for comprehensive 3PL services and capable 3PL providers, responses by 3PL providers to that demand, problems faced by the logistics industry and incentives provided by the Malaysian Government to promote the industry. The approach, concept and framework for this thesis are developed and based principally on the works of Susanne Hertz and Monica Alfredsson (2003), and M. S. Sohail and A. S. Sohal (2003). Based on the findings of the case studies, comparisons were made on 3PL classifications, relationships between 3PL providers and users and services offered. A mail survey was also carried out to strengthen the findings from the case studies. The study found that the majority of 3PL providers in Malaysia are still of the standard 3PL type, offering mainly traditional services such as transportation, warehousing and customs clearance.

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Acknowledgement
I wish to thank everyone who helped me go through the Master of Science in Transportation and Logistics program for the past 2 years. Special thanks to Dr. Leong Choon Heng for pushing me to complete this thesis and to Chin, Sook Yeen, Saravanan, Chew, Visha and Yanti for sharing my anxiety. I would also like to express my appreciation to the Ministry of Science, Technology and Innovation for giving me the opportunity to gain invaluable knowledge in this field. Thank you so much!

Sincerely, Salina Umar CA, CPA (Malaysia & Australia), CFP.

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Table of Contents
Abstract ...........................................................................................................................i Acknowledgement .........................................................................................................ii Table of Contents..........................................................................................................iii List of Figures ...............................................................................................................vi List of Tables ...............................................................................................................vii 1 Introduction........................................................................................................1 1.1 Malaysian Economy............................................................................2 1.2 Thesis Approach .................................................................................4 1.3 3PL Issues in...
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