Study Of Third Party Logistics Based On Contract Theory

In this paper, we bring forward that study for 3rd Party Logistics (3PL) based on Transportation Theory has several disfigurement and we should research 3PL based on Contract Theory. 3PL is not only regarded as a mode of enterprise management, but also a contract compression institute.From the view of Contract Theory, this paper analyzes the cooperation risk which includes moral hazard and incentive problem caused by the multi-task principal-agent in 3PL. Then we loose the suppose condition and use the concept of asset specificity in order to research the 'hold-up' problem in the 3PL. All of the cooperation risk propels to make a decision of logistics outsourcing.Afterwards, this paper gives the model of decision-making of outsourcing for the consignor and found out that the decision-making result is attributed to asset specificity and transportation cost. When the degree of asset specificity is low, the consignor should purchase the logistics service through market. When the degree of asset specificity becomes higher, the consignor should choose 3PL strategic alliance. When the degree of asset specificity is very higher and even 3PL becomes the core competence, the consignor should carry out the logistics service in the enterprise instead of buying 3PL service.Transportation enterprises have several advantages to carry out 3PL. Under the restriction of capital and contract, the modes of the 3PL service include single-function logistics, integrated logistics, logistics agent and supply chain integration. We also believe that strategic alliance is the key factor which guarantees transportation enterprises to turn into a 3PL provider.