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Posted: August 14th, 2022

Performance measurement of third-party logistics service providers/suppliers in shipping

Performance measurement of third-party logistics service providers/suppliers in shipping

Third-party logistics (3PL) service providers/suppliers are essential partners for many businesses that rely on shipping goods to customers or suppliers. However, measuring the performance of 3PL service providers/suppliers is not a straightforward task, as it involves multiple dimensions, criteria, and stakeholders. In this paper, we review the literature on performance measurement of 3PL service providers/suppliers in shipping, and identify the main challenges and best practices in this field. We also propose a framework for designing and implementing a performance measurement system (PMS) for 3PL service providers/suppliers in shipping, based on the balanced scorecard (BSC) approach. The framework consists of four steps: (1) defining the strategic objectives and key performance indicators (KPIs) for each perspective of the BSC; (2) collecting and analyzing data from various sources, such as customer feedback, operational records, and financial reports; (3) evaluating and benchmarking the performance of 3PL service providers/suppliers using appropriate methods, such as data envelopment analysis (DEA), analytic hierarchy process (AHP), or fuzzy logic; and (4) communicating and improving the performance results through feedback loops and continuous improvement initiatives. We illustrate the application of the framework with a case study of a 3PL service provider/supplier in the container shipping industry. The paper concludes with some implications and recommendations for future research and practice.

Works Cited

– Gunasekaran, A., Patel, C., & Tirtiroglu, E. (2001). Performance measures and metrics in a supply chain environment. International Journal of Operations & Production Management, 21(1/2), 71-87.
– Lai, K. H., Ngai, E. W., & Cheng, T. C. (2004). An empirical study of supply chain performance in transport logistics. International Journal of Production Economics, 87(3), 321-331.
– Selviaridis, K., & Spring, M. (2007). Third party logistics: a literature review and research agenda. The International Journal of Logistics Management, 18(1), 125-150.

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