THIRD PARTY LOGISTICS AND LOGISTICS ALLIANCES-OUTSOURCING OF ACTIVITIES OR “ INSOURCING ” OF RESOURCES ?

For the last couple of decades the interest in logistics alliances and third party logistics (TPL) has been growing in academia and industry. The common perspective is to consider TPL as outsourcing of logistics activities. The aim of this paper is to take a complementary perspective by looking at TPL rather as insourcing of resources; i.e. the shipper gets access to the providers’ resources. We start by presenting some basic characteristics of the established view of TPL and some of the problems with TPL identified in prior studies. We further discuss how these problems could be tackled if viewed as resource insourcing rather than activity outsourcing. The analysis indicates that such a perspective provides a useful complement for the understanding of TPL in the four phases of pre-alliance considerations, implementation, alliance operations, and performance assessment. For example, as resources are shared among a number of actors, adaptations in the resource collection of each party are required. This can reduce costs for all participants, but demands a long-term perspective with regards to investments. Further, the fear of losing control when using TPL can be helped through developing close relationships thus gaining indirect control of the provider’s resources. Another example concerns the implementation phase where a resource insourcing perspective would recommend the shipper to avoid detailed direction of suppliers who have been chosen for their competence to provide good services.