The Role of Logistics Service Providers in the Logistics Firms' Supply Chain

Competition amongst companies in the global market has resulted in increased production of goods and services. Enterprises are now faced with the challenges of shipments of raw materials, spare parts from vendors, and the finished goods to consumers. Logistics companies are springing up to tackle transportation and other logistics problems. There are various logistics companies such as logistics intermediaries, carriers and third party logistics service providers in the market which are in one way or the other competing and at the same time cooperating within the supply chain in order to fulfill their assignments to their customers. Third party logistics service providers are experiencing rapid growth because of the advanced demand of services such as the desire to reduce lead time, inventory management, outsourcing, and a host of other functions. Not much has been written on the logistics firms. Besides, most studies on logistics firms and the third-party logistics providers focus more on such aspects like their skills, services, and their relationships with their customers. The purpose of this thesis is to analyze the logistics service providers’ roles within the logistics firms’ supply chain by identifying how the expected roles are performed. In the frame of reference, the author searched several books and articles that are relevant within the scope of the thesis topic. Both qualitative and explorative data collection methods are used in the thesis and these involve conducting interviews, and reading the accounts of other people concerning the thesis topic. The conclusion shows that logistics service providers are able to perform their roles through vertical and horizontal cooperation with other firms and with other logistics firms respectively. Besides, logistics firms do live up to their roles. Carriers and the logistics intermediary now perform more roles than what people think they do, because networks connection and the urge to remain competitive make them to take up value-added services. Third-party logistics service providers add values for their customers through their value-added services in various ways such as time and place utility including tracking and tracing the goods to ensure that they are delivered.