Third-Party Logistics (3PL)

What is Third-Party Logistics?

Third-party logistics, also known as 3PL, is a system where an organisation (a third party) provides logistics services to companies in need of inventory management and distribution. The company (client) with no logistics department usually employs the help of the 3PL company. In turn, the 3PL performs parts or all logistics related activities for the client.

Some of the activities carried out by the third-party logistics are:

  • Inventory storage
  • Inventory management
  • Freight forwarding
  • Shipping and distribution
  • Customs clearance/declaration
  • Packaging and warehousing
  • And more (depending on arrangement)

To enhance the activities 3PL companies, Fourth Party Logistics (4PL) was introduced. The 4PL company controls and manages all supply chain processes of the client.