Services Offered by Third and Fourth Party Logistics Providers

3PL >  < 4PL
Transportation services
Carrier selection
Rate negotiation
Fleet management
Cross docking
Pick and Pack Distribution (direct to store/home)
Delivery documentation Shipment consolidation
Vendor managed inventories
Stock accounting
Customs clearance and documentation
Managing product returns
Retail delivery, set up and on site training
Inventory tracking
Order planning and processing
Information and Communications Technologies (ICT) management
Single invoice
Landed duty paid cost (per piece)
Payment collection
Real time inventory updates
Just in Time (JIT) inventory management
Production planning
Routing transit times air vs. ocean
Supply chain consulting
Real time supply chain monitoring and adjustment

Source: adapted from OECD, Logistics Integration in the Asia-Pacific Region, 2000. CPCS Transcom.

In addition to offering standard transportation services to its customers, such as transportation and warehousing, third-party logistics providers are delving into value-added activities within commodity chains. More advanced services involve performing added value functions on the cargo itself, such as packaging and labeling. A step further would involve complete management of the concerned supply chains, namely financial transactions and the management of information and communication technologies. Fourth party logistics providers (4PLs) focus upon an integrated view of the supply chain and in which way changes in production planning, sourcing, and routing (the usage of a series of 3PL) can help reduce costs and improve the reliability of the supply chains of their customers.