Strategic development of third-party logistics providers (TPLs): “Going under the floor” or “raising the roof”?

• Published in: Industrial marketing management 2021-08, Vol.97, p.183-192
• Main Authors: Borgström, Benedikte, Hertz, Susanne, Jensen, Leif-Magnus
• Format: Article
• Language: English
• Subjects: Digitalization; E-commerce; Servitization; Strategic development; Third party logistics (TPL)
• ISSN: 0019-8501; 1873-2062; 1873-2062
• DOI: 10.1016/j.indmarman.2021.07.008

Contemporary (third-party logistics providers) TPLs are in danger of being stuck in the middle, unable to perform customer adaptation as well as before and unable to achieve sufficient economies of scale. This conceptual paper aims to explore challenges facing the strategic development of TPLs within a context of increased digitalization, e-commerce and servitization. There are two apparent strategic paths. Under circumstances of strong price pressure, there is demand for standardized TPL services offering simplicity, minimalism and functionality based on digitalization, e-commerce and servitization. Alternatively, with market developments responsive to supply chain complexity, digitalization, e-commerce and servitization enable development towards innovation and change. We conclude that these developments do not invalidate existing frameworks for TPL strategies but contribute alternative strategies. We formulate three propositions for each strategic path. To avoid being stuck in the middle, TPLs are encouraged to either develop efficient services through servitized logistics chains and digital solutions or develop advanced solutions to integrate the consumer into the logistics network system through competencies to control increased levels of complexity. •New strategic options for TPLs are created by the three trends digitalization, e-commerce and servitization.•TPLs risk becoming “stuck in the middle” if they do not adapt to the trends.•Three propositions outline how to compete on costs through using new opportunities for standardization, scale and scope.•Three propositions outline innovative potential through managing complexity and change aligning to consumer needs.