What is the difference between 3, 4 and 5PL?
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Member since: 2011-10-01You will get a different answer depending on the Country you are in and the vested interest of who you are asking. By simplifying iit I am making the answer bnoth right and wrong… but here goes;
All of these terminologies 3-5PL (There will no doubt be a ‘6PL’ - it’s just a matter of time) are levels or niches of outsourced logistics management
3PL includes inwards, stock count, put away, storage, order processing, pick/pack and dispatch
4PL is the outsourced management of the above processes, but maybe a separate company and may not include the above services e.g. an independent consultancy firm you have hired to manage or set up your 3PL providers. 4PL can be part or all of the above with the inclusion of ecommerce and web enablement technologies to make your supply chain ‘smarter’.
5PL is new to me – but my brief research has found this definition from Ramanand Kamath, of Bangalore “Since the advent of the 4PL service, the international logistics industry has been researching on the development of the fifth-party logistics service i.e. the realisation of full-scale operation of e-procurement. A key function of the 5PL is to aggregate the demands of the 3PL into a bulky volume for negotiating more favourable rates with airlines and shipping companies regardless of which generation of logistics solution belongs to all.”
The latter almost sounds like an internal term – and not a service a customer would interface with directly.