Third party logistics (3PL) involves outsourcing logistics functions like warehousing and delivery to a third party provider. There are four main types of 3PL providers: standard 3PLs that perform basic functions; service developer 3PLs that offer value-added services; customer adapter 3PLs that take over a customer's logistics; and customer developer 3PLs that fully integrate with a customer. Using a 3PL provides advantages like cost savings, low capital needs, and flexibility, but can result in lost control and challenges with reverse logistics. The 3PL industry is growing rapidly, doubling in revenue compared to GDP, as most large companies now use 3PLs to improve supply chain operations.

1. Third Party Logistics
By
Ramu nishad R
(Reg No- RA1852001020101)

2.  What’s 3PL? 3PL is a service that allows you to
outsource operational logistics from warehousing, all
the way through to delivery, and ultimately enables
you to focus on other parts of your business.
Introduction

3.  Standard 3PLs
 Service Developer 3PL
 Customer Adapter 3PL
 Customer Developer 3PL
Types of 3PL Providers

4. 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
quite their main activity.
Standard 3PLs

5.  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.
Service Developer 3PL

6.  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 does not
develop a new service.
Customer Adapter 3PL

7.  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.
Customer Developer 3PL

8.  Cost and time savings
 Low capital commitment
 Focus
 Flexibility
Advantages

9.  Loss of control
 Reverse logistics
Disadvantages

10. •Third party logistics revenue is growing at a rate
double the US GDP –Global Fortune 500 3PL
market revenue is at $250.2 billion–67% Increase
since 2005
•86% of domestic Fortune 500 Companies use
3PL’s to improve or perform functions in their
supply chains
Third Party Logistics Growth