Understanding the Differences Between 3PL and 4PL in the Logistics and Supply Chain Industries Written by Tenaka Budiman, Executive Board of ALI and Supply Cain Director
| Some time ago, a very knowledge friend explained
to me the functions and differences between 3PL and 4PL. the functions of 4PL,
or fourth party logistics, can only be carried out by a company who first uses
3PL services for delivery processes with assistance from technological system,
for example, for cross-docking. But first, what are the differences between
1PL, 2PL, 3PL and 4PL? the following figure shows the fundamental difference:
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Terminology
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Service
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Actors
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4PL
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Logistics services tailor-made to supply chain needs of the client
using best in class resources
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Supply chain
Management
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Lead logistics
providers &
consultants
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3PL
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Contract service with own or inbuilt resources
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Logistics
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Logistics service
providers
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2PL
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Individual or systemized services with own or external resources
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Transportation
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Carries
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1PL
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Standardized services with own or external resources
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Manufacturing
Retailing
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Cargo
Owner
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As illustrated in above, 1PL is the owner of the cargo while 2PL is the
agent that provides transportation services for the shipping of raw materials,
intermediate goods and finished goods. 3PL is generally the provider of
logistics services, such as warehousing and delivery. As for 4PL, it often
includes 3PL companies which provide services for integrated supply chains but
4PL also provides management for other 3PL companies.
Here are some types of 3PL providers:
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