Third-party Logistics Service Providers Research Articles

A Proposed Approach for Selecting Third Party Logistic Alternatives

At present, the demand for a third-party logistics service provider has become an increasingly important issue for companies to improve customer service and reduce logistics costs. Third-party logistics is using another company to perform some tasks. There are many ways to select a third-party logistic provider, like Multi- criteria decision making, statistical approaches, mathematical programming, artificial intelligence, and hybrid method (or integrated method). This paper presents an ambiguous integrated approach for assessing and selecting third-party logistics service providers. This method consists of two phases, in phase one, Fuzzy Analytical Hierarchy Process (FAHP) is used to determine the weights of the evaluation criteria. In phase two, Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) is used to evaluate alternatives, sequence them, and make the final selection. The objective is to minimize the effects of inaccuracies such as human judgment and preferences while searching for the best decision. Two methods are used to find the fuzzy set: extent analysis method and the geometric mean technique. In this paper, a survey was conducted on papers from 2014 to 2018 to find the most frequently used criteria, seven criteria were identified: reputation, information technology implementation, information sharing, service cost, reliability, quality, and geographic location.

Selection of Logistics Service Provider for the E-Commerce Companies in Pakistan Based on Integrated GRA-TOPSIS Approach

Recently, the demand for third-party logistics providers has become extremely relevant and the key subject for businesses to enhance their service quality and minimize logistics costs. The key success factor for an e-commerce business is product delivery, and the third-party logistics service provider is responsible for that. Each 3PLP has its own business characteristics, meaning it is important to select the most suitable logistics provider for the e-commerce business. This study uses a combination of grey relational analysis (GRA) and the Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) method, assisting decision makers in choosing the best logistics service provider for their e-business. A case study of an e-commerce company based in Faisalabad, Pakistan, was selected to demonstrate the steps of the proposed methods. In this process, seven criteria of logistics suppliers were considered, and then the best alternatives among four logistics provider companies were selected using the proposed method.

Moderating Impact of Innovation Practices on Logistics Practices of 3PLs Service Provider in Malaysia Context

Innovation consists of making collaborative efforts in term of relationship with other organization and institutions to attain competitive advantage by means of innovative services and products, as well as different relationships with their shareholders and stakeholders. Logistics services includes warehousing, freight, transportation, product return and repairs, inventory management, packaging, order entry/order processing. All these can be managed internally. But the challenges of coping with manufacturing and handling logistics which is not the core of the organization business model result to the outsourcing for logistics service providers, such as third-party logistics service providers. This paper aimed at investigating the moderating effect of innovation on logistics practices, particularly, warehousing, transport and packaging services, of 3PLs service provider in Malaysia manufacturing sector. Quantitative method of research was adopted, and questionnaire was distributed electronically. It was analysed using SPSS and the result indicated that innovation of green logistics moderates the relationship between inventory management and operational performance, packaging and service performance but does not moderate relationship between transportation and service performance.

Joint production-planning and distribution optimization of perishable products under a combined shipment structure: A new hybrid policy-based approach

Following the need for joint optimization of decisions in supply chains, this paper newly provides an integrated framework to efficiently fulfill a production-planning-routing problem (PPRP). In such integrated scheme, a set of perishable family-products are manufactured on a single batch-processing machine. These products are dispatched to the customers by a third-party logistics service provider with only two types of licensed eco-friendly transportation facilities. In order to efficiently deliver the manufactured products before they become unusable, we propose a combined shipment structure. To accomplish this, we formulate the problem in the context of a MILP model. In particular, we aim to establish two manufacturing policies based on both increasing and decreasing rates of production and also two delivery policies expressing distinct preferences in fulfilling the customers’ demands. In this regards, we investigate the cost structures obtained from the established integrated planning and the resulting distribution configurations as well. Further, four heuristic algorithms are developed for solving the problem with respect to each hybrid production/distribution scheme derived from the former policies. Finally, to compare the mentioned procedures, it is conducted a numerical study illustrating the preferable efficiency of the plan gained according to the hybrid of the increasing-production-rate and decreasing-delivery-distance policies.

Optimal channel and logistics service selection strategies in the e-commerce context

• We study channel and logistics service selection strategies for offline firms. • Optimal strategy depends on annual service fee and logistics service cost. • Platform’s logistics fee is not always larger than that charged by third-party. • Entering the platform benefits consumers regardless of which logistics is adopted. • Consumer return behavior affects channel and logistics service strategies. In recent years, with the development of e-commerce, some e-commerce platforms have dominated the e-commerce market. Besides, both platforms and third-party logistics providers offer online logistics services, which affect consumer product purchase behavior. In this context, traditional offline firms face the challenges of whether to enter e-commerce platforms and which online logistics service to adopt. To address channel and logistics service selection decisions-making issues of these offline firms, our paper considers a market consisting of an offline firm, an e-commerce platform and a third-party logistics service provider, then develops three theoretical models, i.e., not entering the platform (Model NE), entering the platform and adopting the platform logistics (Model YP), entering the platform and adopting the third-party logistics (Model YT). The results imply that, the firm’s optimal channel and logistics service selection strategies are comprehensively affected by the annual service fee and the logistics cost time-sensitivity coefficient. Note that, the logistics cost time-sensitivity coefficient in this paper is equal to the logistics cost regarding delivery time multiplied by the delivery time, that is, shorter delivery time will bring more logistics cost. Moreover, the rise of labor costs, the outbreak of epidemics and natural disasters, etc., will lead to the increase of the logistics cost time-sensitivity coefficient. Specifically, if the annual service fee is relatively high, the firm should not enter the platform; otherwise, in the case of a relatively low (high) logistics cost time-sensitivity coefficient, the firm should enter the platform and adopt the logistics service of the platform (the third-party). From the perspective of consumers (maybe consider corporate social responsibility), the firm should enter the platform. In the extension, when considering consumer return behavior, we find that, as consumer’s online satisfaction increases, the firm shouldn’t necessarily enter the platform.

A Profit Distribution Model of Reverse Logistics Based on Fuzzy DEA Efficiency—Modified Shapley Value

Reverse logistics is an important way to realize sustainable production and consumption. With the emergence of professional third-party reverse logistics service providers, the outsourcing model has become the main mode of reverse logistics. Whether the distribution of cooperative profit among multiple participants is fair or not determines the quality of the implementation of the outsourcing mode. The traditional Shapley value model is often used to distribute cooperative profit. Since its distribution basis is the marginal profit contribution of each member enterprise to different alliances, it is necessary to estimate the profit of each alliance. However, it is difficult to ensure the accuracy of this estimation, which makes the distribution lack of objectivity. Once the actual profit share deviates from the expectation of member enterprise, the sustainability of the reverse logistics alliance will be affected. This study considers the marginal efficiency contribution of each member enterprise to the alliance and applies it to replace the marginal profit contribution. As the input and output data of reverse logistics cannot be accurately separated from those of the whole enterprise, they are often uncertain. In this paper, we assume that each member enterprise’s input and output data are fuzzy numbers and construct an efficiency measurement model based on fuzzy DEA. Then, we define the characteristic function of alliance and propose a modified Shapley value model to fairly distribute cooperative profit. Finally, an example comprising of two manufacturing enterprises, one sales enterprise, and one third-party reverse logistics service provider is put forward to verify the model’s feasibility and effectiveness. This paper provides a reference for the profit distribution of the reverse logistics.

Interval Type-2 Fuzzy Super SBM Network DEA for Assessing Sustainability Performance of Third-Party Logistics Service Providers Considering Circular Economy Strategies in the Era of Industry 4.0

Stakeholders are increasingly aware of the aspect of sustainability, and the fact that the circular economy facilitates the achievement of sustainable development goals. They place pressure on supply chains to become sustainable, and for this reason, third-party logistics (3PL) service providers, as specialized professionals, play a vital role in sustainable supply chain management. Although developments in technology in the era of Industry 4.0 have been effective at directing 3PLs along the path towards sustainability, integrated management of forward and reverse logistics systems in order to achieve a circular economy and to become sustainable remains a problem, even in developed countries. However, benchmarking and using the experiences of others can help to speed up this path at a minimal cost. An interval type-2 fuzzy super-slack-based measure network DEA was developed to make such benchmarking possible. Governance style, staff behavior, environmental management systems, and social elements are considered, alongside the principles of the circular economy, in order to compare the sustainability performance of 17 3PLs with respect to different aspects through the application of the developed DEA model. Proper benchmarking with respect to strategies and operations of the 3PLs that are recognized as efficient makes it possible for these 3PLs to overcome obstacles and progress at a lower cost. The results show that 3PLs do not have a comprehensive sustainability strategy that is coordinated with an overall vision of the total supply chain. An investigation into the development of a framework with multiple steps for the guidance of 3PLs, as well as the whole supply chain, towards sustainability in the Industry 4.0 era would be a fruitful next study.

Investigating the relationships between uncertainty types and risk management strategies in cross-border e-commerce logistics

PurposeDue to its fast growth, cross-border e-commerce (CBEC) is becoming a popular internationalization model, especially in those destination markets with impressive e-commerce development like China. However, CBEC also brings new logistics challenges and uncertainty. This paper aims to understand how companies cope with logistics uncertainty in this field and whether the different types of uncertainty influence the risk management strategies adopted to face them.Design/methodology/approachA survey targeting online exporters to China and third-party forwarding logistics service providers (3PFLs) is conducted. A structural equation model (SEM) analysis is performed to test the possible relationship between the adopted risk management strategies and the types of uncertainty. The type, industry and size of the company, as well as the distance between the company's home country and China, are used as control variables in the study. Survey results are enriched via interviews with some of the respondents.FindingsThe risk management strategies adopted are dependent on the type of logistics uncertainty that the companies face and, to a minor extent, on the industry the company operates in. Conversely, no significant influence is exerted by other types of control factors, i.e. home country, company size or company type.Originality/valueThe paper investigates logistics uncertainty and risk management approaches in the novel context of CBEC. A systematic review of relevant sources of uncertainty is offered to help both scholars and practitioners understand the current complexities of CBEC. From a theoretical perspective, the paper models the investigated concepts in light of the contingency approach. From a practical perspective, results can be of interest since the list of proposed items can support risk identification and evaluation while the interviews with managers can provide insights on risk management practices.

An analysis of strategies for adopting blockchain technology in the fresh product supply chain

ABSTRACT This paper investigates the strategies for adopting blockchain technology in the fresh product supply chain (FPSC) consisting of a supplier, a third-party logistics service provider (3PL) and an e-tailer. We analyse the optimal strategies of FPSC members under the benchmark scenario where the FPSC does not adopt blockchain technology and those under the three scenarios where the supplier, 3PL and e-tailer lead the construction of the blockchain-based traceability system (BTS), respectively. We find that adopting blockchain technology is not always the optimal decision for the FPSC, which is related to the consumers’ acceptance degree for the product without blockchain technology, the deterioration rate of the fresh product and the allocation proportion of traceability cost of FPSC members when adopting blockchain technology. Regardless of the power and status of each member in the FPSC, it can lead the construction of the BTS. From the perspective of whole FPSC’s profit maximisation, the leader of the FPSC should lead the construction of the BTS under the coordination of a two-part tariff contract. This study provides valuable insights for FPSCs to adopt blockchain technology.

Decisions and Coordination in E-Commerce Supply Chain under Logistics Outsourcing and Altruistic Preferences

Considering the peculiarities of logistics in the electronic commerce (e-commerce) supply chain (ESC) and e-commerce platform’s altruistic preferences, a model including an e-commerce platform, third-party logistics service provider, and manufacturer is constructed. Based on this, three decision models are proposed and equilibrium solutions are obtained by the Stackelberg game. Then, an “altruistic preference joint fixed-cost” contract is proposed to maximize system efficiency. Finally, numerical analysis is used to validate the findings of the paper. The article not only analyzes and compares the optimal decisions under different ESC models, but also explores the intrinsic factors affecting the decisions. This paper finds that the conclusions of dual-channel supply chains or traditional supply chains do not necessarily apply to ESC, and that the effect of altruistic behavior under ESC is influenced by consumer preferences. Moreover, there is a multiparty win–win state for ESC, and this state can be achieved through the “altruistic preference joint fixed-cost” contract. Therefore, the findings of this paper contribute to the development of an e-commerce market and the cooperation of ESC members.

Pre-Sale Strategy for Fresh Agricultural Products Under the Consideration of Logistics Services

Purpose – There is particularly high loss rate for fresh agricultural products (FAP) in the operation of actual supply chain and the development of FAP e-commerce is hindered to some extent. The purpose of this paper is to solve the customer to business (C2B) pre-sale problems of FAP supply chain, in which a third-party logistics service provider (TPLSP) participates in decision-making, to increase the income of each member and to ensure that consumers can obtain the freshest FAP. Design/methodology/approach – This paper considers the C2B pre-sale strategies as a three-echelon fresh FAP supply chain, where the supplier pre-sell products through the online retailers. The market demand in the online channel depends on the retailer’s service level, the pre-sale discount rate and the logistics service efforts of TPLSP. Findings –Stackelberg game method is adopted to study the equilibrium strategies of a supplier-led FAP supply chain under centralized and decentralized decision-making with the existence of a TPLSP, and the optimal pre-sale discount rate, the optimal online service level and the optimal logistics service price provided by TPLSP in the two decision modes are obtained, as well as the optimal profits of the supply chain and each member. Practical implications – The paper provides a practical guideline to managers in fresh products industry in terms of how to cooperate with other supply chain members so as to maximize total profit and to achieve Pareto improvement, and at the meantime, to supply the freshest and safest products to the target market under e-commerce environment. Originality/value – For the e-commerce supply chains with TPLSP participates in decision-making, there are few studies which considers the FAP pre-sale, especially consider the case that the market demand for FAP is affected by freshness and online selling price per unit simultaneously. This paper takes these cases into account, establishes the corresponding mathematical model, and designs a coordination mechanisms.

The impact of environmental regulation on environmental performance: A focus on third party logistics service providers in an emerging country

The literature addresses the link between command and control environmental regulation and environmental performance. However, there is a lack of attention paid to how environmental strategy plays a mediating role in this relationship. In addition, the environmental research in the context of third-party logistics service providers seems to be underexplored. Thus, through the theoretical lens of institutional theory and contingency theory, this study examines the mediating role of environmental strategy on the relationship command and control environmental regulation and environmental performance. Data were collected from small and medium enterprises operating in the logistics industry of Vietnam and partial least square structural equation modeling was employed to examine the proposed hypotheses. The result indicates the full mediating effects of environmental strategy on the link between command and control environmental regulation and environmental performance. In this regard, this study contributes to growing empirical evidence showing that the link between environmental regulation and environmental performance is indirect through mediators. Besides, this study also extends the current knowledge of environmental strategy pursued by third-party logistics providers.

Third-party reverse logistics service provider selection approaches and criteria: a literature review

Third-party reverse logistics service provider selection approaches and criteria: a literature review

Evaluation and Selection of Nigerian Third-Party Logistics Service Providers Using Multi-Criteria Decision Models

Abstract This paper is focused on solving the evaluation and selection of 3PL’s by applying multi-criteria decision-making methods. Nigerian Breweries, Nigerian Bottling Company (NBC), AG Leventis, Kobo logistics, and Flour Mills of Nigeria (FMN) were understudied. The main criteria on which evaluation is based were established: Cost, Service level, Financial Capability, Reputation and Long-term relationship. A combination of two quantitative models was adopted in the study. Relevant data were collected through an oral interview with managers and key decision-makers at the companies. SWARA was first applied to the collated data to determine the relative weights of the criteria. Afterwards, the TOPSIS was applied to the weights developed using SWARA and on the performance of the selected service providers. After the analysis, the best service provider was identified as supplier 2 while the worst was supplier 5.

Exploring Factors Influencing Internationalization of TPL Service Providers: Evidences From Turkey

Purpose – This study aims to determine the factors affecting operational and managerial decisions related to the internationalization process of Third-Party Logistics (TPL) service providers operating in Turkey. Design/methodology/approach – Theoretical background of the study is based on Dunning Eclectic Paradigm which is one of the internationalization approaches, argues that the internationalization of a business depends on its own OLI (ownership-O, location-L, and internalization-I) advantages. The conceptual model of the study was set by grouping these advantages (factors) obtained from a comprehensive literature review and expert decisions. A questionnaire form was structured subject to the network structure of the factors in this model. Data collected from survey forms filled in by 31 logistics experts, were analyzed by using Analytical Network Process (ANP). Findings – The results of the study reveal that the most important factors influencing the internationalization process of TPL service providers are political factors, economic factors, cultural factors and long-term relationships respectively. However, the least effective ones were determined as the number of vehicles, number of employees and market saturation. Discussion – The fact that the first three sub-factors are involved in market factors supports that long-term international logistics activities depend on long-term and stable political and economic relations. Secondly, we argue that a good international logistics process management is carried out thanks to a good international management mentality and technological infrastructure based on developed computer and tracking systems. Additionally, customers focus on the quality of service and how easy they reach the information rather than the number of vehicles or employees. We assume that this study is one of the few studies on the subject and the findings will contribute to both academic and sectoral environment. Since this study is limited to TPL service providers operating in Turkey, the results of the study can be improved by future studies concerning different service providers operating in different regions.

Alpha-cut based fuzzy cognitive maps with applications in decision-making

Fuzzy cognitive maps (FCMs) are widely used fuzzy modeling tools for handling causal interdependencies in complex systems. In FCMs, system variables (concepts) and degree of interrelationships are quantified by means of fuzzy sets. However, these fuzzy sets are defuzzified and fuzzy singletons are processed in the inference algorithm. Defuzzification of fuzzy numbers before the FCM inference implies information loss which is an undesired situation. Moreover, the resultant concept values are fuzzy singletons that these crisp numbers do not provide any information about the range of possible outcomes. There is a research gap in the literature regarding fuzzy number representation in FCMs that the both of the inputs and outputs of FCMs being fuzzy sets. This study proposes alpha-cut based computational procedures for simulating FCMs in which concepts and degree of relationships are represented via fuzzy numbers. The proposed model is tested on well-known problems adopted from the literature by using type-1 fuzzy numbers and the results are compared with the extension principle-based approach. Moreover, the proposed model is extended to interval type-2 (IT2) fuzzy sets and computational details regarding IT2 FCMs are given. Because relative importance of criteria is usually modeled via fuzzy sets in multiple-attribute decision making problems, a new FCM-based objective weighting method is proposed in order to demonstrate the usefulness of fuzzy number representation in FCMs. The proposed model is implemented in the real-life third-party logistics service provider selection problem.

Fresh Agricultural Products Supply Chain Coordination and Volume Loss Reduction Based on Strategic Consumer.

The reduction of fresh agricultural product volume loss throughout the supply chain system is of high importance due to their perishable nature and impact on society, the economy, and environment. In this paper, three models for two-stage pricing, coordination, and volume loss reduction of the supply chain where third-party logistics service providers and retailers act as a Stackelberg leader and a follower for fresh agricultural products are developed, taking into account both volume loss during transport and quality loss in retail in the presence of strategic consumers. The following results are drawn from the contract for sharing revenues and service costs: (1) The supply chain achieve coordination and the products are healthier for consumers; (2) the coordination leads to a reduction in the three types of volume losses simultaneously only if the lowest marginal costs of the supply chain occur under certain conditions; and (3) the increase in the service sensitivity coefficient, the increase in the freshness discount coefficient under certain conditions, the decrease in the consumer benefit discount coefficient under certain conditions, and the decrease in the price sensitivity coefficient lead to an increase in the profit of the supply chain and a reduction in the three types of volume losses.

Service supply chain: from bibliometric analysis to content analysis, current research trends and future research directions

PurposeThe purpose of this study is to carry out the systematic literature review, bibliometric analysis and content analysis of extant literature of service supply chain (SSC).Design/methodology/approachSystematic literature review (SLR) technique was used for identifying the research papers. In the first step after reading titles, abstracts and keywords and, full-length articles wherever required, papers not related to SSC were removed. In second steps papers were read more critically and papers not related to SSC were removed. Finally on 502 papers bibliometric and content analysis was further carried out. Content analysis was based on the clusters formed by bibliographic coupling. Further, content analysis of the recent articles revealed the current research trends and research gaps.FindingsThis paper identified the six existing research diversifications in SSC as (1) logistics SSC, (2) model, framework and conceptual papers, (3) third-party logistics service providers, (4) articles from various perspective, (5) measurement of quality and performance on services and (6) impact of adoption of technology, cooperation and branding on logistics service providers. Further, six future research directions are also provided.Practical implicationsThis research provides a clear view of the progression of publication, research diversification, research themes of six identified clusters, sub-themes of clusters and content analysis of each cluster. Content analysis of recent articles reveals the current research trend and future research directions.Originality/valueThis is a first of its kind of study which presents the diversification of research areas within SSC, bibliometric analysis, content analysis and provides actionable future research direction.

3PL Service Provider Selection with a Goal Programming Model Supported with Multicriteria Decision Making Approaches

In this study, third-party logistics (3PL) service provider selection problem is handled for a foreign trade company that exports the products with high quality level obtained by outsourcing, and who has problems regarding both cost, delivery quality and delivery time. In this direction, 7 criteria are determined for effective evaluation of the performance of the 5 logistics service providers the company is working for and the determination of the most suitable 3PL service provider according to the property of the orders (quantity, mode of conveyance, transportation channel, etc.). The priority levels of service providers are calculated by using these criteria in the combination of Analytic Hierarchy Process (AHP), and Technique for Order Preference by Similarity to Ideal Solution (TOPSIS). Then, a goal programming (GP) model that answers the question of which service provider to choose for which order, considering these priority values and the 12 system constraints and 5 objectives that the company encountered in real life is proposed. This model is the first one proposed in the literature for the selection of 3PL service providers for multimodal international transport with consistent results. The model is solved for the current 10 orders using the last 1-year data of the company and the most appropriate 3PL service provider combination is obtained. As a result of the solution of the problem with this methodology, an improvement is achieved about 7% for the rate of delivery on time, 33% for bid - bill consistency rate, and 29% for the problematic delivery rate.

Supply Chain Risk Management Strategies: A Study of South African Third-Party Logistics Providers

The purpose of this study was to determine the supply chain risk management (SCRM) strategies that South African third-party logistics (3PL) service providers use to mitigate risks, the extent to which they adopt these strategies and the benefits derived thereof. An exploratory and descriptive method technique was adopted. The empirical study comprised of email surveys administered to 398 supply chain managers employed by South African 3PLs. The findings reveal that respondents place greater importance on risk identification than on the other SCRM strategies. Risk assessment attained the lowest rating, implying that 3PL providers placed the least importance on this risk assessment strategy. Risk response and risk monitoring, reporting and control are all adopted to a significantly lesser extent. The findings also revealed that 3PL providers derive significant benefits from all SCRM strategies. A limitation of this study is that not all 3PL providers affiliated with SAAFF participated. In addition, because only members of senior management were included in the study, the opinions of operational and tactical staff were not obtained. The study contributes to the current body of knowledge on SCRM by exploring how 3PL providers in a developing country, such as South Africa, assess supply chain risks, the strategies they have in place to respond to these risks, and the mechanisms in place to monitor and control SCM risks.