Tuesday, February 8, 2011


1PL, 2PL, 3PL and now 4PL.....
Based on SAGAITALIA, 4PL is A fourth party logistic (4PL) provider (also called Lead Logistic Provider LLP) is a supply chain integrator that assembles and manages the resources, capabilities and techniques of its ownorganization with those of complementary service providers to deliver a comprehensive supply chain". 

A Fourth-party logistics provider (abbreviated 4PL), lead logistics provider, or 4th Party Logistics provider, is a consulting firm specialized in logistics, transportation, and supply chain management. Typical fourth-party logistics providers are CPCS, SCMO, BMT, Deloitte,Capgemini, 3t Europe and Accenture.
As the 4PB industry is still in its infancy and currently being created throughout the world (Blue Ocean Strategy), its definition and function still leads to a lot of confusion, even for professionals of the transportation industry.

The confusing is start  when people comparing the role of 3PL and 4PL....Basically 3PL is Operate while 4PL Consult Nowadays advisors, consultants, software companies and even 3PL lay claim to being a 4PL. This is because any company advising a customer on logistics, transportation, and supply chain matters feels it may somehow claim to be a 4PL. This is effectively the case only when the principle of neutrality is respected, and that any conflict of interest is avoided.
A fourth-party logistics provider also offer services considering a 360 degree view, which is not focused on its ability to implement the recommendations it gives, but on all the options available in the market. 
let make the comparison.......
3PL Vs. 4PL

A 4PL is a consultant, and cannot be an operator. This is to respect the principle of neutrality.
A 3PL is an operator, which specializes in integrated operation, warehousing and transportation services. These services may be 100% outsourced, as in the case of "non-asset based 3PL". It is then a pure 3PL. It may also own part of its operations, such as warehouses,vans, or trucks. It then is both a 3PL and a 2PL, but is usually still called a 3PL. It can also offer genuine supply chain consulting services outside of its usual range of services. It is then both a 3PL and a 4PL, but is usually still called a 3PL.
It is important to differentiate 3PL, which actually deliver supply chain consulting services outside of their usual range of integrated operations, from 3PL which use the term consulting or 4PL abusively, as a marketing tool only. Some 3PL currently go as far as giving a title of consultant to their sales people, who are only selling their classical 3PL services. These are clearly 3PL only.
In other cases, 2PL logistics operators, or 3PL with advanced logistics and information technology capabilities may call themselves 4PL, or a mix of 3PL/4PL. Their capabilities are so advanced in logistics, wms, and/or communication that they effectively need to customize their operations for each new customer, which requires a lot intellectual capital, similar to the 4PL. Nevertheless, their ownership of logistics assets contradicts the 4PL status, and leads to conflict of interest for real consultancy. They may be called "advanced logistics 2PL/3PL" or "total logistics 2PL/3PL".
the confusing is no more...the thing is capability to understand the term and main subject.....


  1.  CALM Supply Chain & Logistics Journal, "Fourth Party Logistics: The Evolution of Supply Chain Outsourcing", DN Bauknight, JR Miller, 1999.
  2. "4PL". Toolbox for IT. 2007.
  3.  IJPDLM, "Concept Definition".
  4. Richardson, Helen (2005). "What are you willing to give up?". Logistics Today (Penton Media, Inc). Retrieved 2008-01-22.
  5. The Economist Intelligence Unit, "SCMO - The Next Generation", China Hand November 2006 – Chapter 11: Distribution, November 2006.
  6.  NewNet, "BMT Asia Pacific completes Environmental Impact Assessment for Hong Kong’s first offshore wind farm", 19th June 2009.
  7. Sify Business, "Spotlight on Big Four accounting giants", 2009.
  8. Vault, "Management Strategy Consulting Firms Rankings: Top 50 Consulting Firms", 2009.
  9. JSI Logistics, "4P - A business process outsourcing option for international supply chain management"
  10. Kuehne+Nagel, "4PL Solutions, K+N website".
  11. UPS, "UPS Supply Chain Solutions, UPS website".
  12. Nissin UK, ...etc.
  13. Wikipedia,"Fourth Party Logistics",http://en.wikipedia.org/wiki/Fourth-party_logistics


  1. Bravo - very well articulated and presented
    Augustine Chalissery

  2. Please write to me at augustine@aglfreight.com

  3. Trust Jayem Logistics for the perfect experience, vision, communication and capabilities to ensure that all your unique logistics is delivered on time.
    Best Logistics Company in India