Outsourcing of logistics function is a business dynamics of growing importance all over the world. A growing awareness that competitive advantage comes from the delivery process as much as from the product has been instrumental in upgrading logistics from its traditional backroom function to a strategic boardroom function. In order to handle its logistics activities effectively and efficiently, a company may consider the following options it can provide the function in-house by making the service, or it can own logistics subsidiaries through setting up or buying a logistics firm, or it can outsource the function and buy the service. Currently, there has been a growing interest in the third option, i.e. outsourcing of logistics functions to third party logistics service providers.

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