Lynch (2004) and Arroyo et al. (2006) noted that along with flexibility of operations,
the opportunity to reduce uncertainty is also a major determinant in the
outsourcing of logistics services.
Results relating to motivation for logistics outsourcing are compared in Fig. 3.1
for three countries, namely Australia, India and Singapore. Cost reduction was
reported as the main reason to outsource logistics services across the three
nations—identified by around 80 % of the responding firms. Enhancing operational
flexibility was reported to be the second most important factor in Australia
and Singapore, but not in India, where focusing on core business was identified as
second most important. The need to focus on their core business was reported by
around 75 % of the Indian respondents, compared with around 45 % of the
Australian and Singaporean organizations. In all three countries, access to new
technologies, techniques and expertise was ranked fourth amongst the four reasons
for logistics outsourcing.