The purpose of this research is to explore logistics innovation at third-party logistics (3PL) firms in China. Case studies of 3PL firms in Taiwan, Hong Kong, and Mainland China (Greater China region) have been conducted. Based on interviews, observation and documentation, a qualitative casestudy approach has been followed. Drawing on case-study findings, the driving forces, barriers, and effects of logistics innovation on 3PL firms in China are discussed. Customer requirements, environmental factors, efficiency and effectiveness enhancement, and provision of wider service portfolios and differentiation are strong rationales for 3PL firms to innovate in China. In comparison, cost, time, and employee ability are crucial barriers hindering 3PL firms from innovating in China. Logistics innovation can lead to positive operational performance by increasing efficiency, effectiveness, and service portfolios. Logistics innovation is also positively related to the enhanced relationship with clients, growing sales, reputation and financial performance.

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