A Study of the Dual Facets of Third-Party Logistics Partnerships: Opportunities and Risks in Modern Supply Chains

This paper explores the opportunities, risks, and rewards of companies outsourcing functions, specifically supply chain or logistics functions through an outside entity or a third-party provider. Today’s markets are global in nature, and to be competitive in this global market, companies have to make critical decisions, including the outsourcing of some, if not all, of their supply chain or logistics functions. Outsourcing is a decision that should be approached carefully, as its benefits might not outweigh its costs. The outsourcing proposition has to make sense in various aspects, not only cost, as companies have to balance more than one type of shareholder, as they have ESG commitments (Environmental, Social and Governance) to account for. Plus; off the heels of the recent COVID-19 pandemic, selecting a reliable third- party logistics provider (3PL) is more important than ever to navigate similar future events or other natural disasters that disrupt supply chains.