Introduction:

Logistics
Logistics has been defined as the art of managing the supply chain and the science of managing
and controlling the movement of goods and other resources from the point of origin to the point
of requirement or consumption. It may also involve the integration of information,
transportation, inventory, warehousing/stock-yards, packaging and transportation. Logistics is
the geographic repositioning of materials/resources/products to the required location at the
lowest overall cost possible without detriment to service quality. The origins of logistics can be
traced back ancient Greece where logos is the Greek word meaning ratio, calculation, reason and
Greek military with the name Logistikas were responsible for ensuring supplies were distributed
correctly.

The Oxford English Dictionary defines LOGISTICS as “The branch of military science having
to do with procuring, maintaining and transporting material, personnel and facilities”

3pl (third party logistics):

A third-party logistics provider (abbreviated 3PL, or sometimes TPL) is a firm that provides a

one stop shop service to its customers of outsourced (or "third party") logistics services for part,
or all of their supply chain management functions.

Third party logistics providers typically specialize in integrated

operation, warehousing and transportation services that can be scaled and customized
to customer’s needs based on market conditions and the demands and delivery service
requirements for their products and materials.
Definition:
According to the Council of Supply Chain Management Professionals’ glossary, which is as
follows:

"A firm [that] provides multiple logistics services for use by customers. Preferably, these
services are integrated, or "bundled" together, by the provider. Among the services 3PLs provide
are transportation, warehousing, cross-docking, inventory management, packaging, and freight
forwarding."
3PL’s generally specialize in transport services and warehousing and occasionally other related
services such as re-work and work up solutions customized and scaled to customers’ needs based
on a number of factors including:
  Geographic location
 Market’s served
 Market condition
 Customer demands
 Service Delivery
 Equipment Required

According to Sowinski (2005), some of the services offered by 3PL’s in the current market are:

 Dedicated contract transportation and transportation procurement.

 Inventory management
 Logistics management and consulting
 Freight audit and consulting
 Shipment tracking and tracing
 Reverse logistics and value added services

TYPES OF 3PL:
Hertz and Alfredsson (2003) describe four categories of 3PL providers:

 Standard 3PL provider: 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
their main activity.

 Service developer: 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.

 The customer adapter: 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 do not develop a new service. The
customer base for this type of 3PL provider is typically quite small.

 The customer developer: 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, but will perform extensive and detailed tasks for them.