Third party logistics
The Third Party Logistics Providers (abbreviation: 3PL ) are external logistics service providers . Their core competence is taking over transport and storage from their customers. Third-party logistics providers are increasingly taking care of additional services .
In contrast to Fourth Party Logistics (4PL) and Application Service Provider (ASP), 3PL service providers have their own assets in the classic processes of transport, handling and storage. 4PL providers therefore do not have their own trucks and warehouses, but only provide their know-how (e.g. fleet management).
The combination of 3PL and 4PL competencies distinguishes the Lead Logistics Provider (LLP). With our own trucks and warehouses as well as the necessary know-how to control complex supply chains, customers can be offered logistics services from a single source - in the sense of “one stop shopping”.
Services of a 3PL service provider
Today companies want to sell their products worldwide and at the same time purchase raw materials from all continents . The most important task of a 3PL provider is therefore to transport all these goods. Many 3PL customers go one step further and also hand over the storage of their goods.
Due to the complexity of the distribution requirements, 3PL providers also take on a number of other tasks (“value-added services”). They are specialists in customs clearance and freight forwarding . Sometimes they take orders themselves and process the orders. A 3PL provider can take care of invoicing and monitor payment. Many companies also offer the assembly , packaging and labeling of the goods. The acceptance of returns and repairs can also be handled by a 3PL company. Furthermore, advisory activities are also part of her field of work.
Advantages for the customer
- Cost and time savings
- Due to their size and experience, third party logistics providers can work much more efficiently than customers would be able to manage themselves. Company surveys have shown that outsourcing has reduced logistics costs by an average of 10%, while delivery times have been reduced by 30%.
- Low capital commitment
- Customers can also greatly reduce their tied-up capital , as they do not have to buy their own warehouse or fleet . By outsourcing the logistics area, the customer can focus on their actual core competencies.
- flexibility
- 3PL are also particularly advantageous if your own requirements fluctuate significantly during the year. In such cases, your own warehouse is very poorly utilized.
- Experience
- Customers benefit from the industry expertise of the logistics service provider. These have mostly built global networks that the customer can use to his advantage.
Current market situation
A Capgemini study from 2003 showed that around 80% of companies state that they use the services of a third party logistics provider. That translates into sales of $ 85 billion in the US alone . This value is growing steadily. There has been an annual increase of 10% over the past decade.
There is a trend towards lead logistics providers, i.e. companies that rely on comprehensive service instead of pure transport processing.
In addition, there is currently a very strong concentration trend . Many logistics service providers are joining forces or taking over the competition.
See also
literature
- Langley, Allen, Colombo: Third-party logistics study . Cap Gemini Ernst & Young, Detroit, Michigan, 2003, AC03900134