Innovation within logistics organizations does not occur in isolation. Most innovation occurs in response to environmental factors outside the direct control of management. Factors such as the location of the organizations, the available technologies, the accessibility of knowledge and globalization can all have an impact on how a business responds in innovative ways that ensure it can remain competitive. The logistics function is increasing in its strategic importance as more and more firms in developed economies such as Singapore and Australia are forced to complete globally to survive. In such a dynamic environment, logistics business must innovate; and to benefit from innovative technologies, systems, processes and practices they must consider the external contingencies that will have the greatest impact on the business operation. This paper provides important lessons from managers in logistics organisations in Australia and Singapore; and demonstrates how contingent factors can affect how firms differ in their strategies and capacities to innovate.