Third party logistics (3PL) providers handle specific parts of the supply chain like transportation and warehousing, while fourth party logistics (4PL) providers integrate resources to manage the entire supply chain end-to-end; 3PLs focus on individual functions whereas 4PLs provide complete supply chain solutions and can also manage 3PLs. Key differences include 3PLs handling parts of the process and 4PLs managing the whole process, as well as 3PL services being suited for companies with an existing supply chain and 4PL services being for those seeking an outsourced solution.

1. Date- 17-nov-2016
ASSIGNMENT
SUPPLY CHAIN MANAGEMAENT
Topic: - Third Party Logistics (3PL) and Fourth Party Logistics (4PL)
SUBMITTED BY SUBIMITTED TO
LALIT VERMA Mr. Mohd. Ahsan Sadiq
ROLL NO- 15-MBAK-99 Assistance professor
En. Number - GE1826 Aligarh Muslim University,
Malappuram Centre, Kerala

2. Date- 17-nov-2016
Third Party Logistics (3PL) and Fourth Party Logistics (4PL)
What is a 3PL?
A third party logistics company is one that works with shippers in order to manage another
company’s logistics operations department. 3PL is the action of outsourcing activities that are
related to logistics and distribution.
What is a 4PL?
The concept of a 4PL provider is an integrator that accumulates resources, capabilities and
technologies to run complete supply chain solutions.
Main Difference between 3PLs and 4PLs
The 3PL targets a single function, whereas the 4PL manages the entire process. A 4PL may
manage the 3PL.
3PL
3PL created the basic foundation of logistic outsourcing by facilitating services such as
transport, forwarding, and warehousing.
Third party logistics providers usually specialized in
 Integrating operations
 Warehousing
 Transportation services
 Cross-docking
 Inventory management
 Packaging
 Freight forwarding
These services are scaled and customized to the customer’s specific needs based on their market
conditions and the different demands and delivery service requirements for their products or
materials.
There are thousands of 3PLs in the market that offer different models and perform different
tasks. For example, certain 3PLs may only specialize in certain industries.

3. Date- 17-nov-2016
The 3PL have a large footprint throughout the country. This makes it viable for companies to
service clients in remote regions at a much lower cost than doing it themselves.
Types of 3PL Providers
1. Standard
Basic activities: Pick and pack, warehousing and distribution.
2. Service Developer
Value-added services such as tracking and tracing, cross-docking and specific packaging
3. Customer Adapter
This comes in at the request of a customer. It is when the 3PL takes over complete logistics of
the firm.
4. Customer Developer
This is the highest level of 3PL. This is when the 3PL integrates itself with the company, and
ends up taking over the entire logistics operation.
4PL
A 4PL aims at being a complete solution fulfilling needs which fall outside the scope of a
3PL.
Functions provided by a 4PL company
 Procurement
 Storage
 Distribution
 Processes
A 4PL company takes over the logistics section of a business. This could be the entire process, or
a side business that’s imperative to have as part of the main business.
An example here would be a bicycle importer. The main function is to import bicycles however,
they need to have spare parts for these unique bikes. A 4PL would manage the total logistic
operations for the spare parts business.

4. Date- 17-nov-2016
A 4PL is neutral and will manage the logistics process, regardless of what carriers, forwarders, or
warehouses are used. The 4PL can and will even manage 3PLs that the customer is already
currently using. Many 4PLs have addressed the huge requirements of electronic interface
between numerous companies
Part or Comprehensive?
3PL: 3PL services are aimed at specific parts of the entire supply chain. They provide the final
pieces for an established foundation. For example, within transportation management, 3PLs
handle freights contracts for freights, containers and shipments. But, they do not offer ways to
optimize cost and suggest the correct technology to benefit the process.
4PL: 4PL services bring together various different transactions and steps to create a streamlined
process that optimizes costs and uses the right resources. They integrate various fields and
collaborate between different departments to provide end results of the value proposition for
companies and their customers.
Big or Small?
3PL: Not every company has the financial resources and the time to redesign or strategize their
entire supply chain. Often companies prefer to outsource specific procedures that are in need of
being fixed. Some companies prefer to have control over the core design and let various parties
handle the elements within.
4PL: 4PL initiative is a big step in terms of finance, time, and trust. The building of an entire
supply chain requires intensive collaboration, discussions and modeling of various different
scenarios. This requires time and money. 4PL’s are also completely outsourced services which
mean the company hands it’s entire working process into the palms of another.

5. Date- 17-nov-2016
Difference between 3PL and 4PL
Third party logistics Forth party logistics
A 3PL logistic provider gives its customers ,
services for part, or all of their supply chain
management function
A 4PL provider accumulates resources,
capabilities and technologies to run complete
supply chain solutions
3PL supply chain focuses on niche aspects and
excels at providing services it excels in
4PL provider targets a board array of solutions
to manage the entire supply chain process.
4PL services can include 3PL management
3PL offers warehousing, clearing, safety,
inbound and outbound transportation,
packaging and contracting transporters
4PL deals with supply chain planning,
management, assistance, optimization
3PL is best suited to organization with a supply
chain design in place and need to execute the
process
4PL services are suited to organizations
looking for a start-to-end streamlined solutions
to design and execute all the elements of
supply chain
3PL services usually include collaboration
between in house and outsourced parties as
certain processes are carried out by the
organization themselves
4PL services are entirely outsourced. These
are usually given to reputable organizations so
as to let a company focus on its core
competencies.
 Real life example of 3PL : UPS supply chain solutions
UPS and FedEx have also added minor repairs and simple assembly to the set of services they
offer to their clients. Managing simple repairs at a UPS hub significantly cuts down on the
supply chain effort to handle simple PC repairs when the product is under the warranty because
the product never has to travel beyond the UPS hub.

6. Date- 17-nov-2016
Menlo Logistics is a global supply chain company operating in 5 continents and 20 countries. Its
core business offerings include third-party logistics and supply chain management.
 Real life example of 4PL: Kuehne + Nagel International AG is a global
transportation and logistics company based in Schindellegi, Switzerland
It provides sea freight and airfreight forwarding, contract logistics and overland businesses; with
a focus on providing IT-based logistics solutions.
Its freight forwarding (sea / air) services, include the necessary arrangement for
the transportation of goods by road and rail. Its contract logistics unit
offers warehousing and distribution services.
KN Lead Logistics Solutions includes 4PL Management, Supplier & Inventory Management,
Aftermarket Management and Supply Chain Technology. KN Lead Logistics Solutions acts as
the single point of contact with full operational responsibility with focus on supply-chain
integration.
Kuehne + Nagel's solutions extend to the world's largest industries
including: aerospace, automotive, fast-moving consumer goods, high-tech & consumer
electronics, industrial goods, oil & gas, retail, pharma & healthcare.
Conclusion Some 3PLs have not fully stepped up to meet the exact needs of customers. Some
have become too focused on "managing" tasks, not processes and on serving the parent
company's core business, and have missed opportunities to present value. As a result, 4PLs have
become alternatives for business process outsourcing. These new BPO logistics service providers
enable firms to manage a critical part of their supply chain by providing visibility and integration
across multiple enterprises. They manage with the three key elements of process, people and
technology. Users of a 4PL can focus on core competencies and better manage and utilize
company assets and resources, as to inventory and personnel.

7. Date- 17-nov-2016
References
 Supply chain Management , Strategy, Planning and Operation,( Sunil Chopra, Peter
Meindl, Dharma Vir Kalra)
 http://www.ups-scs.com/
 https://www.google.co.in/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-
8#q=kuehne%20nagel%20wiki
 http://www.supplychain247.com/company/menlo_worldwide_logistics
 https://en.wikipedia.org/wiki/Menlo_Worldwide_Logistics
 http://www.ltdmgmt.com/4pl.php
 http://cerasis.com/2013/08/08/3pl-vs-4pl/
 http://www.cquential.co.za/industries/3pl-4pl/
 http://www.scmo.net/faq/is-scmo-a-3pl-or-a-4pl/