Carrier selection from a 3PL perspective A case study of Kuehne + Nagel alliances with carriers in Sweden

Abstract: Third-party logistics (3PLs) play an important role in overall economy since companies can focus on their core business and contract 3PLs to be in charge of its logistics operation. Many 3PLs do not own all assets in the transportation chain and commonly rely on carriers to ship their client’s loads. Therefore, the alliances between 3PLs and carriers are an important element to be considered in this business reality. Past studies investigated relevant aspects when companies choose carriers. However, the academic debate lacks content from a 3PL point of view. Therefore, the purpose of this study is to indicate the best approach to choose alliances with carriers from a 3PL perspective. The research is based on a case study of the 3PL Kuehne + Nagel in Sweden and its client, referred as The Large Swedish Exporter. Seven important aspects outlined by past studies were tested in a 3PL reality. Those aspects are “Cost”, “Reliability in picking and delivery times”, “Transit Times”, “Ability to deal with unexpected”, “IT data capabilities”, “Customer Relations” and “Damage Risk”. It was found out that 3PLs seem to consider the aspects as a package. Hence, a carrier needs to simultaneously fulfil several different requirements to be a good fit. The highest importance was given for the aspects “Reliability in picking and delivery times” and “Cost”. Only the aspect “transit times” seems not to be relevant in this environment. Besides what was pointed out by other authors, “Ability to deal with seasonality” and “Coopetition relationship” have shown to be relevant aspects for 3PL in the Swedish reality. Practical improvements were suggested for the company Kuehne + Nagel considering their relationship with five different carriers.