Abstract
Not much has been researched in logistics outsourcing in the emerging countries, particularly in the oil and gas industry. This article investigates the feasibility of logistics outsourcing by the international oil and gas companies in the emerging business environment of Nigeria. An exploratory, multicase, qualitative approach was applied, involving 40 interviewees in three international oil companies and three of their logistics service providers. Findings reveal that vendors’ capabilities, host community issues, joint venture influence, and employees’ reactions challenge international oil companies’ logistics outsourcing implementation while relationship management, contract management, and change management skills enable them handle these challenges. The results also show that surveyed organizations implement logistics outsourcing piecemeal and need to scale up their current capabilities to effectively integrate logistics outsourcing. The research confirms logistics outsourcing is achievable in Nigeria, but requires synergies and symbiosis between the oil companies and their local vendors.
Highlights
Third party logistics (3PL) outsourcing has become an integral part of organizational supply chain processes
Twenty participants representing 50% were chosen from the international oil companies (IOCs), and another 50% from the 3PL providers
The article reveals that the IOCs face challenges in implementing 3PL outsourcing in Nigeria, their peculiar logistics needs, and the unique local conditions
Summary
Third party logistics (3PL) outsourcing has become an integral part of organizational supply chain processes. It involves passing on logistics-related activities in part or whole to an external party to execute. Logistics services constitute a critical aspect of the operations and supply processes in the oil & gas business (O&G). O&G operations involve crossborder transactions; exploration and drilling equipment are frequently moved around locations; O&G personnel travel round local and international asset locations and research and development centers; and oil products are transported internationally, involving long-term global supply agreements (Guajardo, Kylinger, & Ronnqvist, 2013; Shyshou, Gribkovskaia, Laporte, & Fagerholt, 2012)
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