University of California Transportation Center

Many firms have turned to logistics outsourcing as a way to restructure their distribution networks and gain competitive advantages. Logistics outsourcing in which a third party logistics (3PL) provider is contracted for all or part of an organization's logistics operations has seen consistently increasing use. Although there are clearly pros and cons of using logistics outsourcing, the full extent of both of these has not been adequately examined. This paper begins to examine some of these risks and discusses some risk reduction measures.