3PL vs 4PL
Third Party Logistics Provider vs Fourth Party Logistics Provider
What is a 3PL?
In the early 70s the term “3PL” was first used to classify intermodal marketing companies also known as (IMCs). Up to that point, transportation contracts had featured only two parties, the shipper and the carrier.
Third-party logistics providers are:
- Freight forwarders
- Courier companies
- Other companies integrating & offering subcontracted logistics and transportation services
What is a 4PL?
The CSCMP defines 4PL as follows
- 4PL organization is often a separate entity established as a joint venture or long-term contract between a primary client and one or more partners;
- 4PL organization acts as a single interface between the client and multiple logistics service providers;
- All aspects (ideally) of the client’s supply chain are managed by the 4PL organization; and,
- It is possible for a major third-party logistics provider to form a 4PL organization within its existing structure.
So what are 1PL's and 2PL's?
- A 1PL is the shipper of the product
- A 2PL is the carrier providing the transportation
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