An analytic network process approach to the selection of logistics service providers for air cargo

Nowadays, enterprises typically outsource their logistics needs to logistics agents, who have become vital partners in managing supply chains. The logistics needs in a supply chain consist of many different interrelated services, each with its own set of requirements and constraints. A logistics agent might specialize in the provision of a single logistics service or might provide a range of services. The selection of logistics agent(s) cannot be separated into a series of stand-alone selections as the decisions are interrelated. Decision makers must assess the merits of individual activity-agent combinations, as well as their interrelationships along the entire supply chain. Such an evaluation is non-trivial, because both tangible and intangible elements are involved. In this research, we model the selection problem using analytic network process, a multiattribute decision-making methodology suitable for assessing interdependent elements, both tangible and intangible. We examine the significance of integration and consolidation of shipments, the trade-offs between costs, benefits and risks within activities of the logistics process, and the differing roles of traditional freight forwarders and integrators.