Surely when it comes to supply chain or logistics, 3PL or 4PL are common terms in these fields.

So what is 3PL? What is 4PL? What is the difference between these two concepts? Let's find out with Meksmart in today's article.

What is 3PL?

First, we will learn about the concept of 3PL. 3PL refers to the provision of third-party or contract logistics or logistics services. The 3PL acts as a representative for shippers to manage and implement logistics services for stakeholders.

Some of the jobs for which the 3PL is responsible include:

• Representing the owner of the goods to carry out procedures related to the export of goods.
• Provide necessary documents to the forwarder and transporter.

• Responsible for domestic transportation and on behalf of importers to go through customs clearance procedures and transport goods to the destination as prescribed.

Currently, 3PLs include many different related services and are closely related from the rotation or transportation of goods to the storage and processing of order information.

The jobs are integrated into the customer's supply chain. More prominently, the 3PL also involves activities carried out by the logistics provider representing the customer based on the terms of the contract that have been discussed and agreed upon.

What is 4PL?

Unlike 3PLs, 4PL is a fourth logistics or logistics provider, the dominant provider also known as LPI.

4PL also refers to consolidated parties, helping to connect the existing resources of the business, promote the inherent potential and take advantage of the material and technical base to create, develop and operate supply chain and logistics solutions.

4PL involves the management as well as the implementation of complex logistics activities.

For example, managing resources, monitoring 3PL functions in the supply chain, and aggregating and empowering resources to conquer the best possible efficiency, increase competitiveness in the global market, build sustainable links and create strategic advantages for businesses…

Distinguish between 3PL and 4PL

To get a closer look at the differences between the 3PL and 4PL concepts, you can look at the following model:

In simple terms, 3PL businesses provide tactical services that focus on a certain link in the supply chain.

Meanwhile, the 4PL business will be directly involved in strategic activities not only related to the customer's supply chain but also to creating and developing the supply chain in line with the company's own mission and vision.

3PL's services typically include warehousing, transportation, cross docking or rapid consolidation, inventory management, freight forwarding, and packaging.

The services of the 4PL business will include strategic cooperation with customers, acting as a bridge between other service parties and customers.

Sometimes 4PL businesses are also understood as lead logistics vendors. It can be said that the role of 4PL businesses is to manage the needs of customers to cooperate with stakeholders who can meet the criteria given by 4PL customers.

Epilogue

In short, we can understand that 3PL will be a provider of logistics and warehouse-related services such as transportation, inventory management,

and fast consolidation. Meanwhile, 4PL will act as a bridge between customers and parties involved in the supply chain not only for customers but also for the company.