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Third party logistics – from an interorganizational point of view

Tage Skjoett‐Larsen (Logistics Management Group, Copenhagen Business School, Denmark)

International Journal of Physical Distribution & Logistics Management

ISSN: 0960-0035

Article publication date: 1 March 2000

Abstract

The adoption of third party logistics is becoming widespread in the industry. Discusses various definitions of third party logistics and the theoretical background for the development of third party arrangements, including both transaction cost theory and network theory. A theoretical framework is then developed to explain the role and motivation for this development. Transaction cost analysis (TCA) explains the conditions under which third party agreements become preferable to the classical choice between market and hierarchy. Network theory explains the dynamics in third party cooperations. Three specific cases of third party logistics are included and analyzed on the bases of the theoretical framework. Concludes that third party logistics are not merely a means to cost efficiency, but also as a strategic tool for creating competitive advantage through increased service and flexibility. Furthermore, the discussion points to the importance of investment in human resources and change in attitudes as part of the success of third party arrangements.

Keywords

Citation

Skjoett‐Larsen, T. (2000), "Third party logistics – from an interorganizational point of view", International Journal of Physical Distribution & Logistics Management, Vol. 30 No. 2, pp. 112-127. https://doi.org/10.1108/09600030010318838

Publisher

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MCB UP Ltd

Copyright © 2000, MCB UP Limited