Third Party Logistics

Third-party logisticstype of 3PL provider is typically quite small.
A third-party logistics provider (abbreviated 3PL) is a• The customer developer: this is the
firm that provides outsourced or "third party" logisticshighest level that a 3PL provider can attain with
services to companies for part or sometimes all ofrespect to its processes and activities. This occurs
their supply chain management function. Third partywhen the 3PL provider integrates itself with the
logistics providers typically specialize in integratedcustomer and takes over their entire logistics
warehousing and transportation services that can befunction. These providers will have few customers,
scaled and customized to customer's needs based onbut will perform extensive and detailed tasks for
market conditions and the demands and deliverythem. by greg
service requirements for their products and materials.Non Asset-based Logistics Providers
•This 3PL performs duties such as quoting, booking,
Types of 3PL providersrouting, and auditing, but doesn't need to own
Hertz, and Alfredsson (2003) describe four categorieswarehousing facilities, vehicles, aircraft, or any other
of 3PL providers: [1]transportation assets. This type of 3PL may possess
• Standard 3PL provider: this is the mostonly desks, computers, and freight industry expertise.
basic form of a 3PL provider. They would performTo be useful, this type of provider must show its
activities such as, pick and pack, warehousing, andcustomers a benefit in financial and operational terms
distribution (business) - the most basic functions ofby leveraging exceptional expertise and ability in the
logistics. For a majority of these firms, the 3PLareas of operations, negotiations, and customer
function is not their main activity.service in a way that complements its customers'
• Service developer: this type of 3PLpreexisting physical assets.
provider will offer their customers advancedFourth-party logistics
value-added services such as: tracking and tracing,Fourth-party logistics (4PL), Lead-Logistics-Provider or
cross-docking, specific packaging, or providing a4th Party Logistics, is a term coined by global
unique security system. A solid IT foundation and aconsulting firm Accenture:
focus on economies of scale and scope will enable" A 4PL is an integrator that assembles the
this type of 3PL provider to perform these types ofresources, capabilities, and technology of its own
tasks.organization and other organizations to design, build
• The customer adapter: this type of 3PLand run comprehensive supply chain solutions.logistics
provider comes in at the request of the customerservices to companies for part or sometimes all of
and essentially takes over complete control of thetheir supply chain management function. A 4PL uses a
company's logistics activities. The 3PL provider3PL to supply service to customers, owning only
improves the logistics dramatically, but do notcomputer systems and intellectual capital.
develop a new service. The customer base for this