Logistics cost saving
LSPs provide lower logistics cost and better services with more flexibility. [75] Sohail and Sohal (2003), conducted survey on the use of 3PL services from Malaysian perspective and revealed that contract logistics services has had a strong positive impact on costs, system performance, and customer satisfaction. Of the respondents, 70 percent or thereabout noted the impact as "positive", while an average of about 20 percent had reported the impact as "very positive" in each of these stated areas. Good relationship helps the shipper to cut down the logistics cost by renewing the contract repeatedly to the LSP.
Expanded outsourcing
As per [74] Sloper (2004), logistics outsourcing is generally a long-term activity requiring both parties to manage medium and long-term uncertainties, good relationship helps in bonding them together even for short term too, thus good relationship encourages expanded outsourcing. Expanded outsourcing helps shipper in many ways for instance, permit to concentrate on core business, provides skilled manpower and advanced technologies at lower rates, enhances productivity and customer service level. Good relationship encourages LSP to expand their range and spread of services. Good relationship also motivates LSP to venture into the outsourcing business in a big way.
Enhanced value
According to [15] Daugherty and Pittman (1995), LSP can enhance value creation for customers leading them to become more competitive and profitable through speedy and superior customer service in logistical supply chain. According to [74] Sloper (2004), enhanced value is the first benefit sought by most shippers, in order to get explicit cost saving and increased market share. Enhanced value by LSP is also responsible for turn around cases for many sick units by cutting down their overheads and offering competitive price to beat the market competition. Thus, enhanced value fetches more market share and help, shippers to grow their business in a competitive market.