LSPs’ Value: Asset-based vs. Non asset-based

Abstract

The current economic downturn is challenging for Logistics Service Providers (LSP) that are already struggling with low profit margins. Competition today among logistics companies is fierce but new opportunities still exist for LSPs. Cost reduction is high on the agenda; companies are reviewing their supply chains to stay competitive in the market. LSPs can be categorized into asset-based and non asset-based. They are collaborators but also potential competitors. The main focus of this thesis is to bring some useful insights when comparing their competitive advantages and the value they provide to customers under different circumstances. It is an explorative study in which a survey and a case study were conducted. The results indicate that asset-based LSPs have an advantage when providing services based on their own assets. But they are less flexible than non asset-based providers when adjusting capacity to demand fluctuation and when freight forwarding to other suppliers on the trade lanes that involve their own assets. However the non asset-based LSPs are fully dependent on alliances with asset-based LSPs. The type of LSPs which are more competitive depends on the market situation, customers‘ preferences, and individual company‘s competencies.