Logistics Service Providers are firms that provide service to its customers logistics services for part, or all of their supply chain management functions.
Some of the service provided by Logistics Service Providers are:
Ocean Freight Shipping
Inventory Management · Pick & Pack
Services: Contact Center, Order Processing and Order Fulfillment
Freight Forwarding Services
Customs Clearance Services.
Consumer buying patterns are changing at a rapid pace and creating new challenges for today’s logistics service providers (LSPs). Online buying and three-day/same-day delivery requirements are pushing retailers and consumer product companies to engage their LSPs in new services.
As B2C grows, contract logistics arms of integrators are now owning their networks. They are also growing click-and-collect locations, as well as making deliveries to consumer homes.
Traditional B2B LSPs are now moving into B2C with existing customers. Alternatively, they are also choosing to establish fulfillment centers for B2C-only business, or segmenting warehouses for B2C work for the same customer.
The industry is also experiencing new adapting technology to support fulfillment and an increase in value-added service offerings such as product kitting, gift wrap and personal greetings, and special labeling.
From implementing a closed-loop supply chain, companies can generate more value and profits. However, closed- loop supply chains add complexity to overall supply chain management. It is a feasible way for companies to outsource all or part of logistics to third-party providers. The selection of a proper provider, which suits the needs of the outsourcing company, is not an easy task. The complexity of this task increases with an increase in the number of selection criteria. This paper focuses on the key factors for the selection of logistics service provider according to the different types of logistic outsourcing partnership. Based on the scope dimension analysis, the partnership is classified into three different types: transactional, strategic, and transformational. They are analyzed based on transaction cost theory, resource-based theory and resource dependence theory respectively. For different type of logistics outsourcing partnership, the key factors for the selection of third- party providers are different.