The objective of this study was the effect of strategic sourcing on the organizational performancernwhich as operational performance in Ethiopian Shipping and Logistics Service Enterprise. Thernstudy used descriptive research design that was used to achieve the purpose of the study. Thernstudy had employed census survey to quantitatively assess the supposed relationship between thernindependent and dependent variables. Questionnaires were used to the formal instrument of datarncollection. Totally 75 questionnaires were distributed and 60 of them filled and returned to makernthe response rate about 80 percent. The collected data were analyzed using descriptive statisticsrn(Mean and standard deviation) and inferential statistics (correlation and regression). Finally,rnthe study revealed that there was a statically significant positive correlation between strategicrnsourcing (measured in terms of supplier selection, Buyer supplier relationship, and contractrnmanagement) and operational performance. The Ethiopian Shipping and Logistics ServicernEnterprise need to maximize its performance by establishing a long term relation with keyrnsuppliers and made a long term contracts and supplying partnership with suppliers. Thernorganization must maximize its operational performance by relying on timely communicationrnwith partners and by working closely with partners to build a good and long –term relationship.