There comes a point when any merchandise exporter will have to seriously consider
the degree of outsourcing of its logistics operations. Most export sales transactions,
of course, involve some type of external service providers, as exporters normally do not
have the transportation equipment or expertise needed to provide door-to-door service
completely on their own. Transportation firms and customs brokers are integral and
indispensable pieces of the global trade picture. While all exporters customarily
outsource activities such as transportation and documentation, it takes a more
strategic decision to enter into a more tight-knit and long term relationship with a third
party logistics (3PL) provider. This paper will use a mathematical procedure called
analytic hierarchy process (AHP) to help in the selection of not just a contending 3PL’s,
but also in the choice and weighing of the selection criteria that go into such a decision
making process. The paper will show how six criteria were chosen, how ten logistics
experts were asked to help weigh these criteria, how data were gathered on the four
3PL finalists, and how the criteria weights and finalist data were combined to arrive at
a recommended decision of which provider to choose. We will also compare how the
decision using AHP might differ from a process where the experts were asked to just
provide a simple, straight ranking of the six criteria.