Case Study: Growth Strategies of Logistics Service Providers

Recently, the logistics industry has experienced significant growth as a result of continuous outsourcing activities by manufacturers, producers, wholesalers and retailers from all industries. Recent trends such as global sourcing, increasing supply-chain complexity in terms of the number of suppliers and buyers, worldwide re-location of production plants and the global nature of e-commerce increases the need for sophisticated logistics solutions. The emergence and the development of third-party logistics (3PL) providers have therefore attracted attention from practitioners and scholars across different disciplines.

The purpose of this case study is to examine the different roles and capabilities of logistics firms in order to understand their future development and strategic growth. In particular, a resource-based approach explains the role of logistics in the strategy of a firm. The case looks at how an organization can not only maintain its competitive advantage but also outperform its competitors and finally achieve a sustained competitive advantage, based on their strategic capabilities of exploiting and accessing bundles of resources.

The findings are based on interviews that were conducted with mid-level and C-level managers across various firms which offer logistics services across Europe. The case study does not focus on a particular industry per se but investigates the understanding of service provision and logistics capabilities across various industries. It also evaluates and differentiates between logistics operators (also referred to as transportation carriers), third-party logistics providers (3PL) and fourth-party logistics providers (4PL), based on their distinct capabilities of exploiting and accessing logistics resources.

The questions and worked out answers look at strategic capabilities and performance of logistics operators, 3PLs and 4PLs.

About the Authors

Christian König is a PhD candidate in Operations Management at Heriot-Watt University.

Nigel Caldwell is associate Professor in Logistics at Heriot Watt University. His research areas include operations and supply management.