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Third-Party Logistics Providers in the Digital Age: Towards a New Competitive Arena?

Author

Listed:
  • Erik Hofmann

    (Chair of Logistics Management, University of St.Gallen, Dufourstrasse 40a, 9000 St. Gallen, Switzerland)

  • Florin Osterwalder

    (Lampe & Schwartze KG Marine Underwriting, Herrlichkeit 5-6, 28199 Bremen, Germany)

Abstract

This paper looks at the impact of digitalization on third-party logistics (3PL) business models. An eclectic framework for the analysis of digital disruptions in service industries is elaborated by linking Porter’s five forces to insights from research on digitalization and innovation. Applying this framework to the business field of 3PL reveals that logistics service providers face significant digital hardship from new technologies such as autonomous vehicles and 3D printing as well as from platform-based business models and the sharing economy. We see the following changes in the competitive arena: First, 3PLs focusing on standard services may lose significant market share in the near future. Second, management-related 3PL activities seem to be increasingly offered by new external competitors, which may downgrade 3PLs to simple forwarders. Third, digitalization enables the forward or backward integration of 3PL customers and suppliers when they establish their own services. In addition to its threats, the opportunities of digitalization for 3PLs are discussed. These include the customization of standardized logistics services, the provision of cloud logistics services, platform-based asset and logistics infrastructure sharing, the “physical internet” as a future transportation system and the adoption and integration of 3D printing into existing 3PL business models.

Suggested Citation

  • Erik Hofmann & Florin Osterwalder, 2017. "Third-Party Logistics Providers in the Digital Age: Towards a New Competitive Arena?," Logistics, MDPI, vol. 1(2), pages 1-28, November.
    • Handle: RePEc:gam:jlogis:v:1:y:2017:i:2:p:9-:d:117611
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    References listed on IDEAS

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    Cited by:

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    2. Tim Gruchmann & Nadine Pratt & Jan Eiten & Ani Melkonyan, 2020. "4PL Digital Business Models in Sea Freight Logistics: The Case of FreightHub," Logistics, MDPI, vol. 4(2), pages 1-14, May.
    3. Redhwan Nour, 2022. "Enhancing the Logistics 4.0 Firms through Information Technology," Sustainability, MDPI, vol. 14(23), pages 1-26, November.
    4. Lehner, Roland, 2023. "Cross-Supply Chain Collaboration Platform for Pallet Management," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 138753, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    5. Christoph Heinbach & Jan Beinke & Friedemann Kammler & Oliver Thomas, 2022. "Data-driven forwarding: a typology of digital platforms for road freight transport management," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(2), pages 807-828, June.
    6. Helwing Veronique & Verfürth Philip & Franz Martin, 2023. "Trucking (un)limited – the impact of digital platforms on labour in production networks of logistics," ZFW – Advances in Economic Geography, De Gruyter, vol. 67(4), pages 177-188, December.
    7. Myung Kyo Kim & Ram Narasimhan & Tobias Schoenherr, 2020. "Leveraging Logistics Competence in New Product Sourcing: The Role of Strategic Intent and Impact on Performance," Logistics, MDPI, vol. 4(4), pages 1-17, October.
    8. Friedrich, Anne & Lange, Anne & Elbert, Ralf, 2022. "How additive manufacturing drives business model change: The perspective of logistics service providers," International Journal of Production Economics, Elsevier, vol. 249(C).
    9. Lennart M. Steinbacher & Tim Düe & Marius Veigt & Michael Freitag, 2024. "Automatic model generation for material flow simulations of Third-Party Logistics," Journal of Intelligent Manufacturing, Springer, vol. 35(8), pages 3857-3874, December.

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