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Legal Analysis of a Contract for Advanced Logistics Services

Olander, Mari LU and Norrman, Andreas LU (2012) In International Journal of Physical Distribution & Logistics Management 42(7). p.673-696
Abstract
Purpose

An advanced 3/4PL-relationship in which the logistics service provider extended normal services by taking ownership of the goods during global distribution, is studied. We describe and analyze the approach to the legal rules a 3/4PL provider and its client company took in their contract, and present some remarks on the extent to which these contract solutions are legally sound.



Design/methodology/approach

A cross-functional (business law and logistics) approach is applied to a single case study. The main data source is a written contract, complemented by in-depth interviews with the 3/4PL’s managing director. A legal analysis is made from four perspectives of non-mandatory and mandatory... (More)
Purpose

An advanced 3/4PL-relationship in which the logistics service provider extended normal services by taking ownership of the goods during global distribution, is studied. We describe and analyze the approach to the legal rules a 3/4PL provider and its client company took in their contract, and present some remarks on the extent to which these contract solutions are legally sound.



Design/methodology/approach

A cross-functional (business law and logistics) approach is applied to a single case study. The main data source is a written contract, complemented by in-depth interviews with the 3/4PL’s managing director. A legal analysis is made from four perspectives of non-mandatory and mandatory commercial legal rules.





Findings

Issues between the offered service, the legal function and reaction in contracts are pointed out, e.g. doubts regarding the legal risk of sales uncertainty, the ownership of goods, the product liability, the roles as commercial agent and as freight forwarding agent. These kinds of advanced logistics services are not clearly handled, e.g. in the standard-form contracts for freight forwarding.



Research limitations/implications

The research is limited to one case and to some aspects of Swedish commercial law, but put in an international perspective. It adds a legal perspective to previous studies on 3/4PL contracts, and it contributes to legal research by its analysis of how firms in real life react to law in their contracts.



Practical implications

Practitioners can get inspiration from an innovative logistics service setup, but also realize what legal challenges to consider when they make their contracts. A tentative approach to aligning logistics’ and lawyers’ work is suggested.





Originality/value

To combine legal and logistics research, and description/analysis of a 3/4PL case where ownership of the goods is transferred to the service provider. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Third party logistics, logistics service providers, fourth party logistics, legal analysis, contract, financial risk, property law.
in
International Journal of Physical Distribution & Logistics Management
volume
42
issue
7
pages
673 - 696
publisher
Emerald Group Publishing Limited
external identifiers
  • wos:000314562200004
  • scopus:84864434666
ISSN
0960-0035
DOI
10.1108/09600031211258147
language
English
LU publication?
yes
id
fb664779-7a2d-4923-9077-4a0d60f81198 (old id 2338699)
alternative location
http://www.emeraldinsight.com/journals.htm?issn=0960-0035&volume=42&issue=7&articleid=17046910&show=abstract
date added to LUP
2012-02-06 10:56:56
date last changed
2017-01-01 06:28:01
@article{fb664779-7a2d-4923-9077-4a0d60f81198,
  abstract     = {Purpose <br/><br>
An advanced 3/4PL-relationship in which the logistics service provider extended normal services by taking ownership of the goods during global distribution, is studied. We describe and analyze the approach to the legal rules a 3/4PL provider and its client company took in their contract, and present some remarks on the extent to which these contract solutions are legally sound.<br/><br>
<br/><br>
Design/methodology/approach<br/><br>
A cross-functional (business law and logistics) approach is applied to a single case study. The main data source is a written contract, complemented by in-depth interviews with the 3/4PL’s managing director. A legal analysis is made from four perspectives of non-mandatory and mandatory commercial legal rules. <br/><br>
 <br/><br>
<br/><br>
Findings <br/><br>
Issues between the offered service, the legal function and reaction in contracts are pointed out, e.g. doubts regarding the legal risk of sales uncertainty, the ownership of goods, the product liability, the roles as commercial agent and as freight forwarding agent. These kinds of advanced logistics services are not clearly handled, e.g. in the standard-form contracts for freight forwarding.<br/><br>
<br/><br>
Research limitations/implications<br/><br>
The research is limited to one case and to some aspects of Swedish commercial law, but put in an international perspective. It adds a legal perspective to previous studies on 3/4PL contracts, and it contributes to legal research by its analysis of how firms in real life react to law in their contracts.<br/><br>
<br/><br>
Practical implications<br/><br>
Practitioners can get inspiration from an innovative logistics service setup, but also realize what legal challenges to consider when they make their contracts. A tentative approach to aligning logistics’ and lawyers’ work is suggested.<br/><br>
<br/><br>
<br/><br>
Originality/value <br/><br>
To combine legal and logistics research, and description/analysis of a 3/4PL case where ownership of the goods is transferred to the service provider.},
  author       = {Olander, Mari and Norrman, Andreas},
  issn         = {0960-0035},
  keyword      = {Third party logistics,logistics service providers,fourth party logistics,legal analysis,contract,financial risk,property law.},
  language     = {eng},
  number       = {7},
  pages        = {673--696},
  publisher    = {Emerald Group Publishing Limited},
  series       = {International Journal of Physical Distribution & Logistics Management},
  title        = {Legal Analysis of a Contract for Advanced Logistics Services},
  url          = {http://dx.doi.org/10.1108/09600031211258147},
  volume       = {42},
  year         = {2012},
}