Taking into account the features of logistics,this paper discusses the key elements constituting the competence of modern logistics firms and defines them in terms of a collection of organizational routines .The core competence of logistics firms comes from the combination of operational capability and absorptive capacity (AC) .Operational capability is the basic capability of sustaining the survival of a firm .It consists of 4 sub-capabilities (market identification & development capability,service management capability,technological innovation capability and network organizing capability) together with a collection of organizational routines and relevant resources .As a higher-level capability with strategic flexibility for resource re-deployment and reorganization of routines,absorptive capacity consists of two components,namely internal and external AC capabilities . The competence of a logistics firm results from the combination of organizational routines and the resources they control at three levels :individual,operational and managerial .Research indicates that the evolution of the competence of a logistics firm,with absorptive capacity as its dominant factor,is a process during which a firm actively seeks for the variation of the routines so as to facilitate the upgrading of its capabilities .During the process,absorptive capacity plays an important role of guiding the evolution of operational capability and promoting the upgrading of the capabilities at different levels .This includes the processes of the triggering of routine,the input of new knowledge,routine variation,multi-level selection,the retention and upgrading of capabilities,and so on .Among them,external absorptive capacity dominates the input of new knowledge which is gained from the multi-level knowledge sharing pipelines in the routine interactions between the leading logistics firms and enterprise partners in the supply chain . The pipelines provide an access to the value-added knowledge of targeted customers .The new ideas and thoughts,generated by the input of new knowledge and guided by the routines of internal absorptive capacity,will lead to variations after being integrated with the existing routines of sub-capabilities and produce new routines or new sub-routines .This part of routine innovation is achieved by the participation of all the sub-capabilities of operational capability with a focus on customer value creation .As a result,new products and services options are created .However,the new products and service options are subject to the systematic routine selection process in a firm .It has been proved that when it comes to sustainable growth,logistics firms find it hard to strike a balance between customer satisfaction and investment cost .The enhancement of one sub-capability does not necessarily produce a positive correlation with operational capability . The verification of synergetic cost acts as the main solution to this problem . The new routine must undergo the″synergistic effect″test involving the four sub-capabilitiesas it is a cross-sector,multi-level systematic selection process,in which the management sector plays a crucial role .Obviously,the creation of new products and new services needs to be accompanied by the improved operational procedures and networks .Consequently,one variation of an important routine might cause the variation of the whole collection of one sub-capability,and the desired generation of synergy effect among all its new sub-capabilities literally leads to the substantial enhancement of the operational capability of logistics firms .In conclusion,the creation of new routines needs to go through the″synergistic effect″verification and″strategic fit″test by means of multi-level selection in the real world .