Evaluating the relative efficiency of third party logistics companies using data envelopment analysis: A case study in road transportation and warehousing

As the backbone of supply chain operations, efficient freight road transportation and warehousing play a crucial role in facilitating business connectivity and ensuring smooth operations. Despite their significance, there remains a gap in understanding the efficiency levels of third-party logistics (3PL) companies in this specific area. To address this gap, this study employs the Data Envelopment Analysis (DEA) model to evaluate the relative efficiency of 3PL companies operating in Vietnam, a country that is positioning logistics as one of the spearhead service industries for the future. Drawing data from practical sources, our analysis encompasses various input and output variables. The findings reveal that 6 out of 13 3PL companies achieved overall efficiency. While many previous studies in this area overlook the slack of both input and output variables, this research conducts a thorough analysis. Through slack variables analysis, inefficient 3PL companies can identify which resources need to be reduced. Furthermore, this research provides valuable insights for policymakers and practitioners seeking to optimize logistics operations and enhance business connectivity in the region. Additionally, it offers actionable recommendations for improving logistics efficiency and delineates future research avenues, thus furnishing practical insights for enhancing the performance of logistics firms in emerging markets like Vietnam.