This document discusses 1PL, 2PL, and 3PL providers in logistics and supply chain management. It defines 1PL as the shipper and 2PL as the asset-based carrier. 3PL involves outsourcing logistics functions to external organizations. Using a 3PL can help businesses by preserving time, sharing responsibility, and creating economies of scale. 3PL providers can be categorized based on the level and type of services offered, from standard providers to integrated customer developers. The document also outlines advantages like cost savings and disadvantages like loss of control of outsourcing to a 3PL.

1. Logistics & Supply Chain Aspects
In Retail Management
3RD PARTY LOGISTICS
BY
SURAJ KUMAR SINGH
RA1852001020115
MINI PROJECT

2. What is 1PL and 2PL?
• A first-party logistics provider (1PL) is a firm or an individual
that needs to have cargo, freight, goods, produce or
merchandise transported from a point A to a point B. The term
first-party logistics provider stands both for the cargo sender
and for the cargo receiver. A 1PL can be a manufacturer, trader,
importer/exporter, wholesaler, retailer or distributor in the
international commerce field. It can also be institutions such a
government department or an individual or family removing
from one place to another. Anyone having goods moved from
their place of origin to their new place is considered to be first
party logistics provider.
• A second-party logistics provider (2PL) is an asset-based
carrier, which actually owns the means of transportation.
Typical 2PLs would be shipping lines which own, lease or
charter their ships; airlines which own, lease or charter their
planes and truck companies which own or lease their trucks

3. THIRD PARTY LOGISTICS
• Third-party logistics involves the utilization of external
organizations to execute logistics activities that have
traditionally been performed within an organization itself.
• for example, a company with its own transport facilities
decides to employ external warehouse specialist, this would
be an example of third party logistics.

4. Reasons why using 3PL can help to run a
business more efficiently.
• Outsourcing logistics, first and foremost, helps a business
preserve valuable time.
• Outsourcing to a Third-Party Logistics Provider can also create
shared responsibility for the business
• The 3PL can share responsibility for a variety of services, such as
supply chain management and locating economies of scale.

5. Level of outsourcing
• Transactional Outsourcing: Based on transactions, with no long
term contracts and no bonding between the 3PL and the
outsourcing company.
• Tactical Outsourcing: Outsourcing on a long term basis with
negotiated contacts and integrated IT systems to facilitate free
information flow and create supply chain visibility.
• Strategic Outsourcing: Based on long-term relationships with
successful outcomes, 3PL companies become partners in supply
chain management and establish transactional transparency.

7. TYPES OF 3PL PROVIDERS
1. Standard 3PL provider
2. Service developer
1. The customer adapter
2. The customer developer

8. • 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 the most basic functions of logistics.
• 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.

9. • 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 3PL providers will have few customers, but
will perform extensive and detailed tasks for them. This is
the case where a 3PL provider can becomes a 4PL provider.
They have become so integrated that they now share in risk
and rewards with their customer.

11. Major Advantages and Disadvantages
• Advantages
• To save time
• Because someone else can do it better
• To re-engineer Distribution Network
• Economies of scale and scope
• Saving on capital investment
• Focus on core competency
• Improved efficiency, service and flexibility
• Disadvantages
• Searching efforts
• Coordination efforts
• Information sharing
• Loss of control

12. Non Asset-based Logistics Providers
• Advancements in technology and the associated increases in
supply chain visibility and inter-company communications
have given rise to a relatively new model for third-party
logistics operations – the “non-asset based logistics
provider.” Non-asset based providers perform functions such
as consultation on packaging and transportation, freight
quoting, financial settlement, auditing, tracking, customer
service and issue resolution.
• To be useful, this type of provider must show its 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.