Key Success Factors, Performance Metrics, and Globalization Issues in the Third-Party Logistics (3PL) Industry: A Survey of North American Service Providers

Abstract

This paper reports on a survey of North American third-party logistics (3PL) service providers. Although current research on 3PL provides valuable insights into the 3PL industry, it is primarily descriptive in nature and does not explore the underlying relationships among several factors and key issues related to the industry. This paper presents an exploratory study of the North American 3PL industry in terms of the key success factors, performance metrics, and globalization issues. Respondents to the survey are categorized based on their ratings of key success factors, and the differences in perceptions among categories are highlighted. Also, the factors with respect to which respondents are significantly underperforming are identified. Importance of the key success factors for various performance metrics is established through dependency relationships, which provide a guideline to managers for allocation of scarce resources. Factors responsible for growing globalization, important issues in connection with setting up 3PL operations in a foreign country, and growth strategies adopted by 3PL firms are also analyzed from the point of view of the respondents. Finally, the contribution to logistics research, implications of the survey findings for logistics managers, and directions for future research on 3PL are presented in the concluding section.

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Notes on contributors

Subrata Mitra

Subrata Mitra is Associate Professor of Operations Management at the Indian Institute of Management (IIM) Calcutta, India. He received his B.E. in Electronics and Telecommunications Engineering and M.E. in Production Management from Jadavpur University, Kolkata, India and Fellowship (Ph.D.) from IIM Calcutta, India. He has teaching, training, consulting and research interests in production and inventory control, logistics and supply chain management, project management and service operations management, and has published extensively in international journals such as European Journal of Operational Research, Journal of the Operational Research Society, Asia Pacific Journal of Operational Research, Omega, etc. He was awarded the prestigious Fulbright Senior Research Fellowship by the U.S. Government to visit the School of Business of The George Washington University, Washington, DC for a period of eight months.

Prabir K. Bagchi

Prabir K. Bagchi is a Professor of Operations and Supply Chain Management and the Senior Associate Dean of the School of Business, George Washington University, Washington, DC. He did B.E. in Mechanical Engineering from Bengal Engineering and Science University, India and M. S. and Ph.D. from the University of Tennessee, Knoxville, USA. His teaching and research interests are in supply chain management. He has work experience in materials management, logistics and production management in multinational companies in various countries. He has consulted for companies in many countries and has published in highly regarded journals in logistics and supply chain management. He has been a visiting professor in prestigious universities in Australia, Denmark, India, Norway, and the UK.