Talk:Fourth-party logistics
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sorry, i still can not clear what is 3PL and 4PL... can i understand like that: 3PL is the real dealer of the logistic procedure or 4PL is more like to build up a concept or optimise this logistic chain?
[edit] 3PL vs. 4PL
3PL is any sort of outsourced logistics not done internally. This may be as simple as using a trucking company, warehousing company, etc. This definition today is broad and includes non-asset based providers such as freight forwarders, truck brokers, etc.
A true 4PL according to this definition brings a toolset of technology, intellectual capital and resources (internal people and external logistics partners). The technology and logistics partnerships of a 4PL allows for the flow of goods, information and funds much more efficiently to the point of need than the traditional multi-link supply chain model.
For example, under the traditional model, a company must invest or outsource warehousing / fulfillment space. They will then source goods into this warehouse and then ship orders out to their customer. They then beat up their vendors to get the best pricing on warehousing and shipping costs to improve profitability. Let's take this a step farther and say that the company sources from overseas and has a warehouse in Memphis, TN. The company sources the goods from China(let's say via Longbeach, CA), brings them into a warehouse in Memphis and then ships them back in a smaller quantity back to California. The idea with a 4PL, you could streamline the process by bringing the goods you needed directly from the source to the customer in CA or at least into a logistics partner's warehouse when it was needed. The 4PL may have higher prices than a company negotiating with a trucking company, steamship line, rail line, etc. directly, but the company does not have the relationships or technology to do what the 4PL can do to streamline the process. Therefore the 4PL brings a lower total cost. Plus, since it is a service, it is less risk and less costly than to try to build it internally. So, ROI and ROA go up as the investment is less and the need for fixed assets and costs is shifted to variable cost. A 4PL is focused on the overall process and relationship vs. a 3PL who is focused on tasks (fulfillment, moving goods, etc.). This is a very simple example to managing complexity that exists in the supply chain today.
Feel free to contact me with questions. Troy Patterson The Hursey Group / FRHL 866-843-1291
[edit] Article Inaccuracies
It is inaccurate to say that all 3PLs are asset-based. CH Robinson Worldwide is a non-asset based 3PL and has been non-asset based for years.
[edit] Consultancy Speak
As far as I can see, this term is used only by Accenture and a couple of other consultancy companies I'd never heard of before. Consultancies make up new business concepts all the time, and they can't all go into Wikipedia. Considering the wikifuss that was made about Enterprise 2.0, I think this article needs a broader base to justify its continued inclusion. Or perhaps just add a section to the 3PL article. --RichardVeryard 08:53, 8 September 2006 (UTC)
I couldn't agree more. If you're a 4PL, it sounds to me like you're just a 3PL using other 3PLs to do your job. That's not new or different. In the freight industry, that's what we call double-brokering. This article should be deleted as an advertisement. Spottacus 02:01, 12 March 2007 (UTC)
