Using a hybrid multi-criteria decision-making approach to evaluate the financial and operational performance of third-party logistics providers

Abstract

In today's world, international exchanges have become more prosperous due to trade and globalization. In this competitive environment, availability of products is as important as price, quality of materials, and construction. This issue doubles the importance of logistics in today's era. In this paper, a new hybrid multi-criteria decision-making MCDM technique for choosing third-party logistics service providers is developed. With having the necessary capacities and facilities, third-party logistics, or 3PLs, can take on logistic activities in a specialized manner so that manufacturers can focus on the important issues related to production optimization. To outsource logistics activities, evaluation, ranking, and selection of 3PLs are strategic decisions. By using the BWM, Best-Worst Method, the identified criteria were weighted to evaluate the financial and operational performance of third-party logistics companies. After that, the EDAS technique was used to rank 3PLs listed on Tehran Stock Exchange. According to the calculations made in this research, Tidewater Co was ranked first, Iran Shipping Co was ranked second, and Tuka Transport, Persian Gulf Transportation, and Rail Seyr Co was ranked third to fifth.