FIFTH PARTY LOGISTICS AND PERFORMANCE OF E-COMMERCE FIRMS IN NAIROBI CITY COUNTY, KENYA
FIFTH PARTY LOGISTICS AND PERFORMANCE OF E-COMMERCE FIRMS IN NAIROBI CITY COUNTY, KENYA
Adrian Ogol - Jomo Kenyatta University of Agriculture and Technology [JKUAT], Nairobi, Kenya
Dr. Peter Gikonyo - Jomo Kenyatta University of Agriculture and Technology [JKUAT], Nairobi, Kenya
ABSTRACT
The study examined the influence of fifth party logistics (5PL) on performance of e-commerce firms in Nairobi City County, Kenya. Fifth party logistics represents an advanced logistics model that leverages specialized software platforms to deliver comprehensive supply chain services. While 5PL offers significant benefits including cost savings, improved visibility and enhanced customer satisfaction, e-commerce firms in Nairobi continue to face challenges in order fulfilment and seamless delivery operations. Guided by Resource Based View (RBV), Transaction Cost Economies (TCE), and Just in Time (JIT) theories, the study adopted a descriptive research design targeting 180 heads of departments from 30 e-commerce firms. A sample of 102 respondents was obtained using Nassiuma's formula, with stratified random sampling employed to select respondents. Data was collected using structured questionnaires and analyzed using descriptive and inferential statistics via SPSS Version 30. The findings revealed strong positive correlations between 5PL practices and firm performance. Distribution had the highest impact (β=0.304), followed by technology integration (β=0.219), lean logistics (β=0.239) and customized warehousing (β=0.271). Regression analysis indicated the four practices collectively accounted for 73.6% of performance variation (R²=0.736). The study concludes that 5PL adoption is a key strategic approach for improving competitiveness and efficiency of e-commerce operations. Recommendations include greater investment in route optimization tools, automated warehousing systems, staff training on lean processes, and full-scale integration of logistics technologies.
