The competitiveness factors in global business have pressurized suppliers and manufacturers to cut the cost of finished products without compromising the quality of products and services. One of the most important ways to reduce the cost and to increase the productivity and customer satisfaction is to outsource the non-core functions. The role of logistics services is very critical to conduct the smooth flow of materials and information in forward and reverse supply chain. There are a number of issues in maintaining good relationships between the third party logistics service providers (3PL) and the client or buyer. In this paper, recent trends in outsourcing of logistics functions and the criteria for selection and evaluation of 3PL with relative importance have been investigated. Finally, the challenges and issues in 3PL relationships have been outlined and the remedies thus proposed. This paper may help the purchase and supply chain managers in selection of efficient 3PL and in maintaining good relationship with better control over the service providers.
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