The actors of the Logistics Business: 2PL, 3PL and 4PL

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Supply Chain Management or Outsourcing Chain Management?

The logistics processes have been the first processes to be outsourced. Logistics Service providers have becoming to concentrate to their core competences: Specialization is now an objective also for logistics providers who has going to differentiate based on the different logistics resources and processes managed. We can check the evolution of logistics management every day on the routes seeing the truck logos: if we before could see truck with logos reminding to transportation, now we can see creative logos reminding integrated logistics management.

Nowadays, logistics operator are increasing to increase the number and the typology services offered to their customers up to become virtual service integrators.

Following a brief classification of logistics operators:

• Main Business owner - MB: It is the main business around which logistics processes are built: i.e. mobile phone manufacturer, editors, automotive parts manufacturer, etc.
• Fourth Party Logistics Service Provider - 4PL: General contractors; It manages the entire process integrating different added value services offered to logistics service providers or to other actors. The 4PL assembles and manage resources, knowledge and technology of other service providers (specially of other logistics service providers). The business model of 4PL can be defined as Virtual Logistics Provider. 4PL name has been proposed by Accenture.
• Third Party Logistics Service Provider - 3PL: It is a service operator who manage the main part of the logistic process outsourced by the MB outsourcing activities to 1PL or 2PL (or other 3PLs). It manage the goods flow between different organizations, from the transportation to the warehousing. Its main objective is the minimization of the costs while respecting contract service levels.
• Second Party Logistics Service Provider - 2PL: It manages one activity (or subprocess) of the logistics process. An example is the Transportation company.
• First Party Logistics Provider - 1PL: It execute a logistics activity. An example is the Truck driver.

Examples of Logistics Service Operators:

4PL:

• Messaggerie Musicali,
  
• Amazon,
  
• lulu
• Many 3PLs are moving towards 4PL...
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3PL:

• DHL,
  
• TNT,
  
• UPS,
  
• SDA.

2PL:

• Bartolini,
  
• Barsanti.

1PL: Owner of single resources such as Vehicles, Warehouses, handling vehicles, etc.

The image in this post show the outsourcing chain between logistics operators. One question arise: It is time to introduce OCM - Outsourcing Chain Management in place of SCM - Supply Chain Management?

In the following some links about the topic:

• Glossario DHL
• SupplayChain.it