Sustainability-related risk management in buying logistics services: An exploratory cross-case analysis

Abstract

Purpose Sustainability-related risk management of logistics service providers (LSPs) is an essential part of sustainability performance of focal companies, as logistics services touch the entire supply chain (SC) – from raw material sources to end-customers. The purpose of this paper, draws on resource-based view and stakeholder theory in exploring how companies can manage environmental and social sustainability-related risks from logistics service suppliers. This kind of capability is essential in order to maintain reputation in the eyes of stakeholders, and to maintain long-term financial performance.

Design/methodology/approach The data of this multiple-case study were collected from semi-structured interviews in eight case-companies in Finland. Five of the cases are primary logistics buyers, and three represent LSP companies.

Findings The cross-case analysis showed that primary buyers of logistics services use their sustainability criteria as a prerequisite for LSP candidates, and when the level is adequate and equal, other factors, e.g. price and capacity, are decisive. Based on the analysis, large LSPs are preparing for the future competition, and act in a more sustainable manner than their customers (buyers) expect at the moment, while small LSPs strictly comply with the regulation. However, buyers’ requirements for sustainable logistics services are increasing as the stakeholder expectations for comprehensively sustainable SCs are growing.

Originality/value Only little research has been conducted on sustainable logistics from the buyer company’s risk management perspective. This paper adds the knowledge of sustainability-related risk management in purchasing of logistics services and in the logistics industry.