Green Supplier Selection and Performance of Third-Party Logistics Providers in Nairobi City County, Kenya.

Abstract

Sustainable procurement has become a strategic imperative in modern supply chains as organizations integrate environmental, social and economic considerations into purchasing decisions. Third-party logistics (3PL) providers in Nairobi City County, Kenya's principal logistics and distribution hub, operate under pressure to control costs, maintain service quality and meet delivery commitments while responding to growing environmental expectations, yet empirical evidence on how environmental criteria in supplier selection relate to their performance remains limited. This study therefore examined the relationship between green supplier selection and the performance of 3PL providers in Nairobi City County, Kenya. Green supplier selection was operationalized through environmental certification, supplier environmental audits, and environmental compliance and carbon-footprint considerations alongside conventional supplier criteria. The study was anchored on the Resource-Based View and supported by Institutional Theory, Stakeholder Theory and Ecological Modernization Theory. A quantitative approach and descriptive research design were adopted. The target population comprised 200 3PL firms registered with the Kenya International Freight and Warehousing Association (KIFWA) and operating in Nairobi City County, from which a minimum sample of 134 respondents was determined using Yamane's formula. Primary data were collected using structured questionnaires administered to operations managers, supply chain officers and environmental officers; 107 usable questionnaires were returned, representing a response rate of 88.4%. Data were analysed in SPSS using descriptive statistics, Pearson correlation and simple linear regression. Respondents agreed that green supplier selection practices are applied, with item means ranging from 3.77 to 3.98. Green supplier selection had a strong, positive and statistically significant relationship with 3PL performance (r = .652, p < .001) and explained 42.4% of the variation in performance (R² = .424; adjusted R² = .419; F(1, 105) = 77.446, p < .001). A one-unit improvement in green supplier selection was associated with a 0.568-unit increase in performance (B = .568, β = .652, t = 8.800, p < .001), and the null hypothesis was therefore rejected. The study concludes that integrating environmental criteria into supplier evaluation is associated with stronger perceived performance in cost, quality and delivery timeliness. It recommends that 3PL firms integrate verifiable environmental requirements into supplier prequalification and evaluation, apply proportionate supplier audits and monitor supplier compliance throughout contract implementation, while regulators and industry associations strengthen enforcement and capacity building. As the evidence is cross-sectional and based on questionnaire responses, the findings should be interpreted as associations rather than proof of causality.