China’s “ONE
BELT ONE ROAD”  project will encourage
investments in transportation, trade, energy and mining, eventually resulting
in strengthened regional cooperation, superior economic growth, trade
diversification and political flexibility (Ferdinand 2016). China will invest $46 billion
in China-Pakistan economic corridor and the completion of this mega project
will pull foreign investment and hence promote logistics, energy, and
resources, information & capital flow exchange between the two countries (Dong).  The project will link Chinese city Kashgar
and Pakistani sea port Gawadar with railways, highways and pipelines, thus, facilitating
trade in the region. However, security issues and political instability in Pakistan
pose real threats to the project implementation (Markey and West 2016). These catastrophic risks also
impact logistics performance of the entities and hence results in economic
losses (Wagner and Bode 2008). The current research will
address the gap as if how fear of terrorism is affecting the logistics
performance of 3PL companies which are engaged in logistics innovation. It will
further explore means of attaining superior performance despite regional
unrest.

Pakistani
civil and military leadership have shown serious concerns towards the success
of CPEC and tender full support because the project is linked to economic,
political and security benefits for the country (Markey and West 2016). Past studies have explored into
the role of external factors to logistics innovation (Lin 2007), relationship of logistics innovation
with logistics performance (Fugate, Mentzer et al. 2010) and examination of logistics
performance along with several risk dimensions (Wagner and Bode 2008).  A project like CPEC highly depends on how the
logistics performance of the actors working together is important for the
project implementation. If the logistics aspect of the project is not handled
well, this could cause delays and economic burdens. (Asnaashari, Knight et al. 2009). Therefore, this particular
research will shed light onto the relationship of innovative logistics and
logistics performance and how fear of terrorism effects this relationship. The
will help communities across regions to understand the importance of this
relationship and finding innovative ways to manage these types of risks.

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“ONE BELT ONE ROAD” Project of china is aimed at
linking several countries across Asia, Africa, Europe and Middle-East (Abid and Ashfaq 2015) (Markey and West 2016). All the countries globally are facing critical
issues linked to political instability and terrorism since 9/11. Therefore, the
results of the study will have wider significance for the managers not only in
Pakistan but also across the world. If the proposed model stands true, 3PL
companies should seek greater support from civil-military leadership for better
logistics performance. The research will also add new dimension to the existing
theory by confirming the impact of terrorism and political instability on
logistics performance of 3PL companies operating in similar scenarios.