Despite the critical role of logistics service providers (LSPs) in improving the environmental
sustainability of supply chains, there is still uncertainty about how LSPs can turn
environmental management into competitive advantage. Based on a Finnish national logistics
survey and financial reporting data from 266 LSPs, this article examines their competitive
strategies and green supply chain management (GSCM), and tests their respective relationships
with environmental and financial performance. Financial data are used to measure financial
performance in a novel way. The findings indicate that leading LSPs with operational
excellence and strong brands are more advanced in terms of GSCM than LSPs that do
not excel in any competitive priority. GSCM practices are positively related to environmental
performance, but not to financial performance. However, managers should not be discouraged
by the apparent absence of short‐term financial benefits of GSCM practices, which
in any case could enhance future differentiation opportunities.