Third-Party Logistics Provider Selection Criteria in a Supply Chain: A Study of Leading Grocery Retailers

As international competition intensifies, technological development and worldwide deregulation make the logistics systems and processes more sophisticated and challenging. Firms have been more and more concentrated on their core business functions, which generally include design, production, marketing and sales. This impels logistics to be among the first function that can be outsourced to organizations whose core business is logistics itself, and these organizations are known as third-party logistics providers (3PL). This paper mainly focuses on the exploration of the main attributes that a logistics service provider should have to be contracted by a leading grocery retailer. After a review of relevant literature and a study of two actual cases (M&S and Tesco), the paper presents three attributes: low price, technology capabilities and operation experience.