The role of Third-Party Logistics Providers in managing international supply chain triads

Abstract

Third-Party Logistics Providers (3PLs) play a key role in managing supply chains and during the last decades, they extend their logistics services beyond transportation and warehousing to include supplier management and development, pre-retail services, and demand/delivery planning.This study aims to illustrate how the 3PL companies add value to the supply chain and particularly to suppliers and clients at the same time as well as how they manage their three-way relationship. To understand international triads, the study reviews key theories: Resource-based view, social capital perspective, Agency theory, Transaction cost economics. Findings show 3PLs play a key role in developing and managing the multi-source triad. 3PLs are becoming essential to clients so they can focus on their core activities while at the same time they receive all the necessary experience, specialization, and technology to achieve the lowest transit time. the study demonstrates that there are diverse types of triadic alliances and there is a different degree of 3PLs involvement in each type. Findings show the catalytic role of 3PLs in managing international logistics and providing in-depth insights about the upstream supply chain of different global retailers. A triadic alliance can add value to all participating members and act as a strategic, competitive advantage, especially for manufacturers. 3PLs can strategically utilise their assets and capabilities such as flexibility, trust, and efficiency to gain agency power. This study examines four triads, using the case study approach. Sources of evidence include interviews with managers in key roles in the triads, internal documents, published reports, and secondary data analysis. The study presents significant theoretical and managerial suggestions and recommendations for future research.