Platform or Third-Party Service Provider? An Analysis of Logistics Mode Selection Strategy for Manufacturers in E-Commerce Supply Chains

Abstract

In recent years, the rise of e-commerce has led to the dominance of some platforms in the market. Both these platforms and third-party logistics providers are now offering online logistics services. Under this context, the brand manufacturers face challenges of deciding whether to outsource their logistics needs to third-party logistics service providers (LSPs), rely on the e-commerce platform itself, or establish collaborative partnerships with them. The combination between the decision to outsource or cooperate and the choice of service providers yields four typical scenarios: outsourcing to the platform without cooperation (Case PB), outsourcing to the platform with cooperation (Case P), outsourcing to the LSP without cooperation (Case LB), and outsourcing to the LSP with cooperation (Case L). This paper proposes a game-theoretic model to investigate the manufacturer's optimal selection of logistics mode. We examine the economic and environmental performances of four logistics modes, with a particular emphasis on the mutual benefits and costs shared between manufacturers and their logistics partners. Our results reveal that collaboration in sustainable logistics improvement leads to higher sustainability levels, augmented logistics fees, and increased sales volumes compared to noncollaborative strategies. Additionally, we find that outsourcing to the e-commerce platform generally results in higher profits and superior environmental performance for manufacturers, contingent upon the sustainability enhancement being sufficiently effective. Empirical evidence from surveys and interviews with industry experts supports our theoretical findings, underscoring the critical role of collaboration in achieving both economic and environmental sustainability within the supply chain. This study contributes to the literature on logistics outsourcing by evaluating manufacturers' strategic decisions in selecting logistics modes and accentuates the importance of cooperation in advancing sustainable logistics practices.