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Difference Between 3PL and 4PL:
Third-Party Logistics (3PL)
Outsourcing all or much of a company;s logistics operations to a specialized company. The term 3PL was first used in the early 1970s to identify intermodal marketing companies (IMCs) in transportation contracts. Up to that point, contracts for transportation had featured only two parties, the shipper and the carrier. When IMCs entered the picture as intermediaries that accepted shipments from the shippers and tendered them to the rail carriers they became the third party to the contract, the 3PL. Definition has broadened to the point where these days, every company that offers some kind of logistics service for hire calls itself a 3PL. Preferably, these services are integrated, or bundled, together by the provider. Services they provide are transportation, warehousing, cross-docking, inventory management, packaging, and freight forwarding. In 2008 legislation passed declaring that the legal definition of a 3PL is a person who solely receives, holds, or otherwise transports a consumer product in the ordinary course of business but who does not take title to the product.
Fourth-Party Logistics (4PL)
Differs from third party logistics in the following ways;
1) 4PL organization is often a separate entity established as a joint venture or long-term contract between a primary client and one or more partners;
2) 4PL organization acts as a single interface between the client and multiple logistics service providers;
3) All aspects (ideally) of the client’s supply chain are managed by the 4PL organization; and,
4) It is possible for a major third-party logistics provider to form a 4PL organization within its existing structure. However, 4PL was originally defined by Accenture as a trademark in 1996 and defined as a supply chain integrator that assembles and manages the resources, capabilities, and technology of its own organization with those of complementary service providers to deliver a comprehensive supply chain solution, but is no longer registered.
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