Encroachment or not? Strategy options for third-party logistics service providers considering the freshness-keeping efforts

This paper investigates whether and how third-party logistics (3PL) providers should encroach by launching their own e-commerce channel and analyzes the strategic impacts for a fresh-produce supply chain. We model a retailer-led fresh-food chain including a supplier, an offline retailer and a 3PL provider and contrast two scenarios: (A) the 3PL only provides logistics and distribution services without participating in product sales; (B) the 3PL not only provides logistics and distribution services but also directly engages in selling products through its own e-commerce platform. Equilibrium analysis and numerical experiments are conducted to compare profits, freshness-keeping effort, prices and demands. The analysis reveals three findings: (1) When the 3PL establishes its own e-commerce platform, its profit is higher than in the case without platform entry; therefore, channel encroachment is more beneficial for the 3PL provider. (2) By establishing an e-commerce platform, the 3PL not only raises the retailer’s requirements for its freshness-keeping efforts but also expands the market size, thereby stimulating demand growth. (3) By establishing their own e-commerce platforms, 3PL providers achieve Pareto improvement in the supply chain, leading to higher profitability for all participating members.

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Publication Details

Journal
Journal of the Operational Research Society
Published
2026-08-26
DOI
https://doi.org/10.1080/01605682.2026.2720621
Primary Topic
Supply Chain and Inventory Management
Type
article
Field-Weighted Citation Impact
0.00
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article

Encroachment or not? Strategy options for third-party logistics service providers considering the freshness-keeping efforts

Guoli Wang, Junyan Wang, Yuan Lü
Journal of the Operational Research Society
Supply Chain and Inventory Management
article

Encroachment or not? Strategy options for third-party logistics service providers considering the freshness-keeping efforts

Guoli Wang, Junyan Wang, Yuan Lü
article en

Abstract

This paper investigates whether and how third-party logistics (3PL) providers should encroach by launching their own e-commerce channel and analyzes the strategic impacts for a fresh-produce supply chain. We model a retailer-led fresh-food chain including a supplier, an offline retailer and a 3PL provider and contrast two scenarios: (A) the 3PL only provides logistics and distribution services without participating in product sales; (B) the 3PL not only provides logistics and distribution services but also directly engages in selling products through its own e-commerce platform. Equilibrium analysis and numerical experiments are conducted to compare profits, freshness-keeping effort, prices and demands. The analysis reveals three findings: (1) When the 3PL establishes its own e-commerce platform, its profit is higher than in the case without platform entry; therefore, channel encroachment is more beneficial for the 3PL provider. (2) By establishing an e-commerce platform, the 3PL not only raises the retailer’s requirements for its freshness-keeping efforts but also expands the market size, thereby stimulating demand growth. (3) By establishing their own e-commerce platforms, 3PL providers achieve Pareto improvement in the supply chain, leading to higher profitability for all participating members.

Journal of the Operational Research Society
Tianjin University of Science and Technology (CN)
Openalex Percentile: Top 100%
Supply Chain and Inventory Management
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