Monday, February 7, 2011

Third Party Logistics

logistics require person in charge in certain process...
like shipping, exporting, importing, and so i would like to share what is actually role of third party logistics and what they contribute to logistics?
and then, is there other party involve same as well as them?

Third-party logistics

A third-party logistics provider (abbreviated 3PL, or sometimes TPL) is a firm that provides a one stop shop service to its customer of outsourced (or "third party") logistics services for part, or all of their supply chain management functions.
Third party logistics providers typically specialize in integrated operation, warehousing and transportations services that can be scaled and customized to customer's needs based on market conditions and the demands and delivery service requirements for their products and materials.
As state at "Council of supply chain management professional' :
"A firm [that] provides multiple logistics services for use by customers. Preferably, these services are integrated, or "bundled" together, by the provider. Among the services 3PLs provide are transportation, warehousing, cross-docking, inventory management, packaging, and freight forwarding."...

Lets we put it in a simple ways...
like we know, 3PL, usually an agent..doing a clearance, appoint haulage, booking transportation or arrange transporter...They help a company to solve logistics problem....
To make an easy figure, there type of 3PL that could be describes such as forwarding, courier company and other company that related in providing logistics and transportation....
easy to understand....
but hard to describe..unless we know the basic....
and her is the long explanation about types of 3PL
Third-party logistics providers
  • freight forwarders
  • courier companies
  • other companies integrating & offering subcontracted logistics and transportation services
Hertz and Alfredsson (2003) describe four categories of 3PL providers:
  • Standard 3PL provider: this is the most basic form of a 3PL provider. They would perform activities such as, pick and pack, warehousing, and distribution (business) – the most basic functions of logistics. For a majority of these firms, the 3PL function is not their main activity.
  • Service developer: this type of 3PL provider will offer their customers advanced value-added services such as: tracking and tracing, cross-docking, specific packaging, or providing a unique security system. A solid IT foundation and a focus on economies of scale and scope will enable this type of 3PL provider to perform these types of tasks.
  • The customer adapter: this type of 3PL provider comes in at the request of the customer and essentially takes over complete control of the company’s logistics activities. The 3PL provider improves the logistics dramatically, but do not develop a new service. The customer base for this type of 3PL provider is typically quite small.
  • The customer developer: this is the highest level that a 3PL provider can attain with respect to its processes and activities. This occurs when the 3PL provider integrates itself with the customer and takes over their entire logistics function. These providers will have few customers, but will perform extensive and detailed tasks for them.

clear and long explanation right?....
other than 3PL?
ooo...there is 4PL...
it will be in the next post...but here...
party involving in 3PL is called  “non-asset based logistics provider”.
they perform functions such as consultation on packaging and transportation, freight quoting, financial settlement, auditing, tracking, customer service and issue resolution. However, they don’t employ any truck drivers or warehouse personnel, and they don’t own any physical freight distribution assets of their own – no trucks, no storage trailers, no pallets, and no warehousing. A non-assets based provider consists of a team of domain experts with accumulated freight industry expertise and information technology assets. They fill a role similar to freight agents or brokers, but maintain a significantly greater degree of “hands on” involvement in the transportation of products.
To be useful, providers must show their customers a benefit in financial and operational terms by leveraging exceptional expertise and ability in the areas of operations, negotiations, and customer service in a way that complements its customers' preexisting physical assets.

little bit confusing here...but....try to distinguish both 3Pl and non-asset based logistics provider...they kind of same actually...but for me there is slightly different between of them.....try read it and find the differences between these two party..... 

Example of party and company...
In the "PL" terminology, it is important to differentiate the 3PL from the:
  • 1PL, which are the shipper or the consignee,
  • 2PL, which are actual carriers such as YRC Worldwide, UPS, FedEx,
  • 4PL, which are consulting firms such as CPCS, SCMO, BMT, Deloitte, and Accenture.

Similarities between 3PL and 2PL
3PL can also be 2PL at the same time in the following cases:
  • when a shipping line owns a freight forwarder,
  • when an airline owns a general sales agent (GSA),
  • when a freight forwarder owns trucks or a warehouse,
  • when a courier company owns planes.


  1. your blog consist easy features. This essay is very attractive and useful. Your this work defiantly helps other. Chicago Third Party Logistics

  2. Excellent! This can be a remarkable article by the way! I'm definitely going to do this submit. Cheers for the great Thought. Visit us.
    Logistics Services Bangalore | Warehousing and distribution company

  3. Metro Combined Logistics has this service. Thank you for sharing this topic, it is really interesting and I know now what 3pl is. :)

  4. If you are looking to shake hands with the top logistics service provider in India, your one-stop destination is Jayem Logistics.
    Top Warehousing Company |Best Supplychain Company in India

  5. Third party logistics are better logistics service provider as compared to the local freight provider company.