3PLs – Adapting to the times

What is a 3PL – a Third Party Logistics – provider? It’s an acronym frequently used in logistics’ circles but seldom defined. It’s a sort of catchall expression for an intangible collection of services that have become necessary to couple together and enable freight movements through an increasingly complex supply chain. Many of these services have been around a great deal longer than modern – containerized – shipping. A number of shipping services like freight forwarding and customhouse brokerage are nearly as old as civilization itself. In some respects, the 3PL is just an evolutionary step forward, but in other ways the 3PL is a completely new industry forged in the fires of demanding times.

The road that Mode Transportation took to becoming a 3PL shows how the need for freight management systems has pushed the development of the sector.
The road that Mode Transportation took to becoming a 3PL shows how the need for freight management systems has pushed the development of the sector.

For this reason, in compiling a 3PL list like our AJOT’s Top Fifty North American 3PLs it is worth noting that many are familiar names. The Top 3PLs were once ranked in other lists as “top” freight forwarders, customhouse brokers, NVOs, LTL and/or FTL trucking companies, IMCs, integrators, and now, even the ocean carriers have entered the category. Added to this list of services of traditional supply chain service providers is a new and growing list of technology providers that are labeled as 3PLs or 4PLs. And now the service providers to the tech segment are sometimes being referred to as 5PLs.

Not surprisingly, there is a little confusion in where all these “PLs” actually fit in the logistics universe. The ever widening services have morphed from the original idea of simply moving an item of freight from A-to-B into something quite else. Relatively recently, B2B [Business-To-Business] applications crept into the menu of logistics services with the expansion of SaaS [Software as a Service] from a localized software application to cloudware with its far reaching computerized clout. Now, the new logistics’ universe includes the manufacturer and the end-user (the consumer) and the services linking these logistics’ extremes is far more intricate than anything that has come before. Aggregating global supply chain data is now part of the overarching effort to integrate Big Data into commercial activities irrespective of sector.

The service designs for end-to-end tracking and information capture have become goals unto themselves with commercial utility – what is moving off the shelves – ranging far beyond the actual fundamentals of moving freight. In the current frame of reference for the logistics industry, tech is less defined by whether a build is vertical or horizontal as there is almost amoeba like need for collaboration with partners in all quadrants to maximize ROIs.

Building more utility into logistics systems has become the mantra of the 3PL sector and what drives the…

View the full article free in the AJOT Digital Edition or by Logging in!

View Digital Edition