A survey of third party logistics in Mexico and a comparison with reports on Europe and USA

Purpose - To investigate the status of third party logistics (3PL) in Mexico and the feasibility of 3PL as a global, uniform strategy.Design methodology approach - A survey among firms located in the central part of Mexico, followed by a comparison of the results with data from existing 3PL studies of Europe and the USA.Findings - 3PL seems a common but "low profile" practice among large Mexican firms. Only a third outsources more than three functions, which are mostly supportive and operational. Compared to Mexico, 3PL use is higher in Europe and USA. Firms in Europe and USA focus more on tactical, integrated functions and cost reduction when using 3PL while Mexican firms aim for improved customer service and concentration on core activities. The lack of competitive local providers makes 3PL expensive and may favour larger, international providers.Research limitations implications - The results warrant additional surveys of Mexico and other developing regions, preferably using a unique survey design and covering more SME's. Case studies are needed to further investigate how multinational firms manage the 3PL decision process on different organizational and regional levels.Practical implications - Uniform, global 3PL strategies should be considered with care: what may work in Europe may not work in Mexico or the USA. Outsourcing should be seen as a means and not as an end. Mexican firms can use 3PL successfully yet achieve different ends than European firms. Mexico's large SME market offers opportunities for providers of 3PL services.Originality value - This is the first thorough study about outsourcing logistics practices in Mexico, which adds a Latin-American perspective to the very few 3PL studies conducted in developing regions. In addition, the comparison of Mexican outsourcing practice with practices across the USA and Europe offers a cross-cultural view on 3PL and identifies the need for further mapping of expectations and conditions related to effective outsourcing of logistics in other regions.