Managing 3PL relationships

Abstract

Fierce global competitiveness and heightened expectations of customers are forcing companies to forge collaborative partnerships with Third Party Logistics (3PL) service providers. Most companies cite greater flexibility, operational efficiency, improved customer service levels, enhanced supply chain performance and better focus on their core businesses as part of the advantages of engaging the services of third party logistics providers. Despite the endless advantages of third party logistics and supply chain activities, a lot of relationships either fail or are dissolved. The paper attempts to analyse the management of 3PL relationship and the impact on overall satisfaction of user organisations with the expected business performance and productivity of relationships. Research findings indicate that high-involvements in 3PL relationships, leading to collaborative partnerships, will have a positive impact on increased usage of 3PL services.