Abstract: Strongly supported by government subsidies, third-party logistics companies significantly improve logistics services to attract online orders for the right to speak in e-commerce supply chain. By analyzing cost structure of third-party logistics service provider, the total logistics cost is broken down into fixed investment cost and variable operation cost. Logistics service affects both market demand and variable operation cost. In our model, three power structure scenarios are considered based on different supply chain powers of third-party logistics service provider, namely service provider dominant mode, logistics service provider vice-dominant mode and logistics service provider following mode, to examine the impact of power structure on supply chain decision-making. Our results reveal that the power of third-party logistics service provider does have an influence on supply chain decisions in e-commerce logistics outsourcing supply chain. Specifically, the smaller power the third-party logistics service provider has, the greater the logistics service level, market size, manufacturer profit and online retailer profit would be. Besides, wholesale price, retail price, and logistics service provider's profit relationship under different power structures are jointly affected by the logistics investment coefficient and logistics distribution costs. Under certain conditions, the e-commerce logistics outsourcing supply chain reaches Pareto optimal solution. In addition, decreasing logistics service investment coefficient and increasing logistics service cost coefficient and unit logistics charge can positively enhance the logistics service level, market demand and profits of the manufacturer and e-retailer. Based on sensitivity analysis, the functions of two types of government subsidy incentives are studied so that suggestions can be provided for policy makers and supply chain parties.

Key words: e-commerce supply chain;third-party logistics; power structures; Stackelberg gaming