Abstract: With the rapid development of service industry, logistics management, as the third profits source, has increasingly become one of the crucial ways for enterprises to gain competitiveness. To further enhance the level of logistics service quality, reduce the logistics service quality cost and improve the performance of supply chain, the logistics service supply chain has emerged with a new trend of vertical integration. For instance, Cainiao, as a data-driven socialized collaborative platform, has integrated with many logistics service providers (e.g., Best Express and YTO Express) by investing in express logistics, logistics technology, trunk transportation, warehouse facilities, cross-border logistics and so on, resulting in the establishment of a “logistics kingdom”. However, vertical integration, which always involves multiple interest topics, will lead to conflicts in resources and interests and also tend to be affected by market environment. Therefore, it is necessary to study the existence conditions of vertical integration strategy and examine its impacts on the operation efficiency of the logistics service supply chain.

Key words: vertical integration; logistics service supply chain; logistics service quality cost; competition intensity