Profit Vs. Not-for-Profit: Logistics Service Providers (LSP) and Humanitarian relief
Purpose: Logistics outsourcing recently spread to humanitarian supply chains. Academics thus began to explore the emergence of LSPs in the field: commercial or humanitarian organizations (HOs). Authors point out that outsourcing improves the delivery of goods, the logistics capabilities of HOs, while reducing risks. However, previous works failed to distinguish Not-for-Profit from commercial contracts in humanitarian logistics. Our research seeks to refine and expand the role that LSPs play in humanitarian supply chains based on Vega and Roussat’s (2015) conceptualization and further Sigala and Wakolbinger’s (2019) partial validation. Research Approach: Our exploratory research is a qualitative endeavor, following abductive reasoning process and using a ‘systematic combining’ approach. Based on an interview guide built upon an extensive literature review, we conducted interviews with LSP identified as major players in humanitarian relief among which Kuehne + Nagel, DHL, Agility, Damco. For each company, we interviewed a contract manager or the head of Aid SBU (when it exists) and the CSR manager. The interviews were transcribed and coded using a QDAS (NVivo) in order to ensure internal validity. Findings and Originality: First results reveal a huge diversity of situations. The prices for logistics services can go from usual commercial tariffs to pre-fixed rates negotiated on a periodic basis. Some firms use open book policies, propose price reductions or finally provide services pro-bono. The research also identifies levers justifying the choice of the pricing politics. Surprisingly, humanitarian logistics is clearly considered as a business unit, independent of CSR commitments Research Impact: Our research contributes to the growing trend of research on humanitarian logistics as a service. Focusing on the characteristics of the relation between LSPs and HOs helps to clarify the public-private relationships and the conditions of service providing, thus completing recent works. Practical Impact: Results can help HOs understanding LSPs’ decision process and both partners better grasping the other’s mindset.