The Evolution of Logistics Networks: A Study of the Sichuan-Chongqing Steel Industry

Abstract

Over the past three decades, China's logistics industry has undergone a profound transformation from internalised structures under the planned economy to multi-tiered outsourcing arrangements in the market economy. This transformation provides a valuable empirical case for understanding industrial network evolution. However, existing research has largely taken the emergence of independent logistics enterprises as a given, failing to examine the evolutionary processes through which logistics networks evolve from internalised to outsourced structures. This thesis addresses this gap by investigating how logistics networks evolve from internalised structures to multi-tiered outsourcing arrangements, focusing on the steel logistics industry in China's Sichuan-Chongqing region. It develops a synthesised theoretical framework that integrates Global Production Networks (GPN), Evolutionary Economic Geography (EEG), and institutional approaches to address the limitations of existing frameworks. This thesis employs a qualitative case study methodology adapted to the Chinese cultural context, involving 59 semi-structured interviews, participant observation through a month-long internship at a major steel plant in Sichuan-Chongqing region, and secondary data analysis. Through the process, this thesis obtains in-deeps exploration of informal practices which parallel with formal institutions. This thesis is structured around three research questions examined through separate empirical chapters. First, the thesis traces the overall evolutionary trajectory of steel logistics networks by analysing how various forms of embeddedness influence network formation and development. It disaggregates embeddedness into individual and organisational dimensions, revealing how different embeddedness forms of interact and reconfigure during institutional transformation. Second, it examines how intermediaries—including logistics subsidiaries, third-party logistics companies, fleets, and digital freight platforms—shape network structures and spatial configurations. It reveals how these intermediaries emerge through organisational functional differentiation and co-evolve with changing institutional contexts. Third, the research explores how top-down institutional logics and bottom-up actor strategies interact to form network dynamics. It identifies unique governance mechanisms under China's business context that contain both informal guanxi institutions and formal transaction-based institutions. These hybrid arrangements work together in sustaining multitiered outsourcing structures.