For several decades companies have been concentrating resources on their core competencies and outsourcing what they regard as ancillary functions. As logistics is often considered to be supporting rather than mainstream function,  it  has been an obvious candidate  for externalization. For many firms, logistics has ceased to be an activity that they directly manage and become something that they purchase from outside specialists. Others have retained an in-house logistical operation but increasingly supplemented it with contract services. The manner in which these services are purchased can, therefore, have a major influence on the quality and efficiency of a company’s logistics operation.

This book chapter reviews recent trends in the outsourcing of logistical activities, reports on the experience of firms that have contracted out their logistics and outlines ways in which users and providers of logistical services can develop more stable and mutually beneficial relationships.

An updated version of this book chapter was published in the fourth edition of this book in 2003. 

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