ABSTRACT
This chapter reviews 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. The increasing externalization of logistical services has occurred in response to a range of demand and supply pressures. Outsourcing also gives companies access to specialist expertise in firms whose core skill is logistics management. The increase in the level and diversity of firms' external expenditure on logistical services has been accompanied by important changes in the way they purchase them and in the nature of their relationship with outside contractors. An important feature of the reorganization has been the outsourcing of many activities previously performed in-house. The resulting growth in the level and variety of external expenditure on logistics has induced important changes in the way that these services are purchased.
