Third-party logistics

Third-party logistics (abbreviated as 3PL, or TPL) is an organization's long term commitment of outsourcing its distribution services to third-party logistics businesses.^[1]

Third-party logistics providers typically specialize in integrated operations of warehousing and transportation services that can be scaled and customized to customers' needs, based on market conditions, to meet the demands and delivery service requirements for their products. Services often extend beyond logistics to include value-added services related to the production or procurement of goods, such as services that integrate parts of the supply chain. A provider of such integrated services is referenced as a third-party supply chain management provider (3PSCM), or as a supply chain management service provider (SCMSP). 3PL targets particular functions within supply management, such as warehousing, transportation, or raw material provision.^[2]

The global 3PL market reached $75 billion in 2014, and grew to $157 billion in the US; demand growth for 3PL services in the US (7.4% YoY) outpaced the growth of the US economy in 2014. As of 2014, 80 percent of all Fortune 500 companies and 96 percent of Fortune 100 used some form of 3PL services.^[3]

^ Ghiani, Gianpaolo; Laporte, Gilbert; Musmanno, Roberto (2004). Introduction to Logistics Systems Planning and Control. John Wiley & Sons. p. 5. ISBN 9780470849170. Retrieved 8 January 2023.
^ "Outsourcing Transport and Warehousing: Pricing, Honesty and Contentious Issues" Published in Australian Freight Logistics Magazine. Retrieved 2014-3-25.
^ "Want a Better Supply Chain? Here Are 4 Reasons to Outsource Your Transportation Management". Talking Logistics with Adrian Gonzalez. 2015-02-24. Retrieved 2015-12-06.

[Ghiani_2004-1] Ghiani, Gianpaolo; Laporte, Gilbert; Musmanno, Roberto (2004). Introduction to Logistics Systems Planning and Control. John Wiley & Sons. p. 5. ISBN 9780470849170. Retrieved 8 January 2023.

[2] "Outsourcing Transport and Warehousing: Pricing, Honesty and Contentious Issues" Published in Australian Freight Logistics Magazine. Retrieved 2014-3-25.

[3] "Want a Better Supply Chain? Here Are 4 Reasons to Outsource Your Transportation Management". Talking Logistics with Adrian Gonzalez. 2015-02-24. Retrieved 2015-12-06.

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