What is a 3PL?

  • Diagram showing how a 3PL works
  • Diagram showing how a 4PL works
Johnston Logistics UK

If you are considering outsourcing your businesses logistics requirements you have probably been searching online, contacting companies for more information and are likely to have come across the term 3PL and even 4PL in your research.

 

Do you know what they mean?

 

When outsourcing part or all of your logistics or supply chain management, it is important to understand the difference between these two terms in order to choose the right logistics partner for your needs.

 

As the logistics market evolved, so did the services that could be outsourced.  In the beginning, a company (typically a manufacturer or supplier) would have its own logistics team or department and would manage all logistics requirements internally.  In simple terms this is 1PL.

 

2PL comes into play where an external company is used to provide transportation and basic warehousing management.

 

With the rise in an increasingly global economy and the need to maximise efficiencies, minimise costs and meet the ever growing delivery expectations of consumers there has been a rise in demand for the specialist services provided by third party logistics (3PL) providers.  3PL companies, like Johnston Logistics UK, provide distribution and warehousing, along with other value added services such as cross docking, assembly and pick-packing among others.

 

However, there may come a point where a business needs an even greater level of support.  As it becomes increasingly complex or starts to operate on an international basis, the business may not have the expertise or technology to be able to formulate and integrate a supply chain strategy.  In this scenario, a 4PL provider may be engaged, they are typically a consultancy firm that will design and manage a complete supply chain solution for the customer.  They will manage all activities in the supply chain including IT systems, business processes and may also manage any 3PL providers the customer employs.

 

Where a company has several different supply chains, 5PL refers to the process of aligning these into one network, managed by one provider.  This service may be an IT system or e-business which optimises supply chain management.

 

At Johnston Logistics UK we provide a range 3PL services to our customers.  We have a range of warehousing facilities and distribution suppliers so we can design bespoke storage and transportation solutions tailored to customers’ needs.

 

We have a sophisticated warehousing stock management system which allows us to track every item in and out of the warehouse, as well as providing real-time updates on stock levels, despatch details and full traceability on all goods.

 

As well as storage we also provide a wide range of value added services including cross-docking, packaging break bulk and pallet reworking.

 

Read more about our 3PL services

 

 

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