The importance of warehouses in logistics outsourcing: benchmarking the perspectives of 3PL providers and shippers

Abstract

Purpose An ever-increasing number of companies outsource logistics activities to third-party logistics (3PL) providers to beat the competition. From the buyer's (shippers') perspective, selecting the right 3PL provider is crucial, and from the 3PL provider's perspective, it is imperative to be attractive and to retain clients. To this aim, a potential lever can be physical assets, such as warehouses, which the literature has traditionally neglected. The objective is to benchmark the importance of warehouses for 3PL providers to attract/retain clients and for shippers to select the right 3PL provider. Design/methodology/approach The authors performed an empirical investigation through interviews on dyads (3PL providers/shippers) and utilized the Best-Worst Method (BWM) to rank the criteria used in the 3PL buying process and allow the warehouse's role to emerge. Findings Results show that the 3PL buying process consists of four phases and three evaluation steps. The selection criteria are classified into three groups: order qualifiers, order winners and retention factors. The warehouse has different levels of importance throughout the process. It appears that it can indirectly enhance the attractiveness and retention capability of 3PL providers through other selection criteria. Originality/value By combining the resource-based view and the customer value theory, this research extends the theory on logistics outsourcing by studying the phases of the 3PL buying process and scrutinizing the criteria used in different evaluation steps. The research adds a double perspective of analysis (3PL providers and shippers), which is missing in the literature, and focuses on the importance of warehouses.