Register now or log in to join your professional community.
3PL (third party logistics provider)
Definition has broadened to the point where these days, every company that offers some kind of logistics service for hire calls itself a 3PL.
To put forward some standard definitions, we would adopt the definition of “3PL” reads as follows: “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.”
4PL (fourth party logistics provider)
The term “4PL” has generated even more confusion. Companies described the 4PL (or fourth-party logistics provider) as an integrator, but today advisors, consultants, software companies and even 3PLs lay claim to being a 4PL. The trademark was later abandoned, and the term has become a part of the public domain.
Since the definitions get a little fuzzy on 4PL, would suggest definition of 4PL, as follows: “A supply chain integrator that assembles and manages the resources, capabilities, and technology of its own organization with those of complementary service providers to deliver a comprehensive supply chain solution.”
3PL stands for third party logistics. These are essentially businesses that provide a single or multiple types of logistics-related services.
On the other hand, 4PL is basically an arrangement wherein a firm outsources the abovementioned services to a 3PL firm and additionally hires another firm that specializes in managing and coordinating the activities of the 3PL firm.
Both 3 PL and 4 PL are outsourcing.
The diffrence is, 3 PL is outsourcing one or more functions of supply chain to a 3rd party viz: warehousing, transportation etc. But 4 PL is outsourcing the whole or part of supply chain of one or more functions of a company to a third party viz: if it is car manufacturing company the supply chain of spare parts can be outsourced to a third party.
3PL Third party logistics work with a contract,3 PL provider provides service (warehousing, transport,distribution etc) to other companies. They have a written contract for a time period.
A 4PL company takes over the logistics section of a business. Its include procurement, finiancial, storage, distrubution etc.
All the shipping lines generally act as 4PL.
3PL are the agent here who act as the interface between the organization and these shipping lines.
3 PL - connotation of this term is that company is competent to handle logistics and other SCM Functions of a big conglomerate company.It is sort of outsourcing logistics so that conglomerate can focus on core operations.
4 PL - As the SCM functions have increased day by day the concept of Lead Logistic Provider has gained currency.This is 4 PL.It is like consolidation of several 3 PLs into one entity called 4 PL.
