Thursday, July 21, 2005

How many PL's does it take to get that Abercrombie & Fitch T-Shirt from Fuzhou to Paducha?

What the heck is the difference between a 3pl and a 4pl organization? Their service offerings? Asset ownership versus non-asset ownership? Or, is there really a difference?

It is normally recognized that any firm which specializes in providing logistics service and is independent from any manufacturer's logistics division can be called a third-party logistics provider (3PL).

The term "4PL" was actually coined by the consulting group Accenture. In fact, they also hold the trademark to the name 4PL. Accenture defines a 4PL in the following manner: "A 4PL is an integrator that assembles the resources, capabilities, and technology of its own organization and other organizations to design, build and run comprehensive supply chain solutions."

The biggest difference (at least from my perspective) between 3PL and 4PL is the management (ownership) of assets. The 3PL organization has a core offering of one or more of the following services: warehousing, common carrier options (truckload, LTL, Parcel, Ocean, Air, NVO, etc.), forwarding, truck leasing, etc. Most logistics providers originally got into other areas to increase utilization of core products (trucks, warehouses, etc.) A pure 4PL play is mainly technology and integration. They become the knowledge (intelligence) hub that ties together services to meet a client's requirement. This allows the 4PL to, in theory and according to their claims, initiate the best services on behalf of their client base.

It should be noted, that the major players in 3PL, like Exel, TNT, DHL, etc have a much more robust brand acknowledgment, than the pure 4PL companies.

Is it this simple? Nah...ask ten people the above question, and you will get ten different answers. The above is my humble opinion...what is your definition?


Anonymous Anonymous said...
zija - drinklifein



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