Characteristics of Logistics Outsourcing in Bulgaria: The Perspectives of the Logistics Service Providers and their Customers

Abstract

AbstractThe increased demand and supply of logistics services bring together the logistics service providers (LSPs) and the companies that outsource logistics activities. LSPs stand in between those companies and their customers, thus playing an essential role for supply chain integration. If the two parties have different viewpoints of the processes in the supply chain, the fulfillment of the goal to satisfy the end customers may be hindered. The purpose of this article is two-fold: First, to investigate the characteristics of logistics outsourcing in Bulgaria from the perspectives of the logistics service providers and their customers, and more specifically, to compare their viewpoints concerning the motives for outsourcing, the methods and contents of communication and some relationship management aspects; Second, to assess the relations of the communication and relationship management aspects to customer satisfaction. This article is based on empirical data provided by 138 manufacturing and trading companies and 136 LSPs and collected through two structured questionnaires designed to address the researched issues. The data were analyzed using descriptive statistics and the independent samples t-test. The research found that the service related reasons for logistics outsourcing are prevailing and that LSPs overestimate, compared to manufacturing and trading companies, motives related to service, organizational capabilities and relationships, while more manufacturing and trading companies concern as important the availability of logistics assets and the provision of value-added services. The research also found that both the LSPs and their customers consider that the extent of sharing of knowledge and information essential for material flow integration is very low and that the usage of team meetings and joint teams is quite rare. Also, customers do not view their relationships with the LSPs as so collaborative as viewed by the LSPs. Furthermore, the research proved the existence of positive relationships between customer satisfaction and communication through team meetings and joint teams, knowledge sharing concerning material flow management and relationship management issues such as trust, mutual problem solving, understanding the logistics strategy of the other party and respecting its financial interests. The research findings may help fill in some of the gaps between LSPs and their customers. They point the need for LSPs to include in their service offerings more value-added services and to invest in assets that provide reliable and flexible services for their customers. The research also highlights the importance of knowledge sharing and trust building and reveals great potential for effective trust-based alliances between LSPs and their customers that could help them extract more competitive benefits from their relationships.