Outsourcing Transportation Services: Evidence from Mexican Maquiladora Industry

The purpose of this paper is to present evidence of the use of transportation outsourcing in the Mexican maquiladora industry. Additionally, the paper studies the decision making process that takes place in favor of choosing to outsource the transportation activity. An empirical research in the form of in depth case studies was carried out in Mexico to study and test eight propositions related to the decision to outsource transportation services. The propositions are based on literature review of agency theory and outsourcing theory. Among the finding are: there is a positive relationship between the decision to outsource transportation services and non-core activities. Additionally, the decision to outsource is favored due to cost efficiency. There is a significant relationship between uncertainty of the transportation service and the use of monitoring systems. The relevance of this study is that there is limited research on outsourcing logistics activities in Mexico.