In logistics research there are a number of scholars who use these concepts interchangeably, and others prefer to only use LSPs. There is no clear threshold point that classifies logistics firms into 3PL and LSPs. What do you think and which concept do you prefer to use, and why?
Many authors use these terms as synonymous. In my opinion, there is no significant difference between these concepts. For me, in a practical scope, 3PL and LPLs are the same thing.
Thanks All, Heidi if the Marriott Hotels called their carrier an 3PL then we've to converse your concept, right? formally, Marriott carrier called "Marriott Logistics LIc" then some could call it an 3PL and others could call it LSP, right? why? what are the bases use to classify logistics firms into different groups. I read some books chapters, papers .... but there is no clear base for that.
I think LSP is the general classification of the logistics firms, that includes 3PL, 4PL, 5PL, carriers, freight-forward...etc.
that's mean every 3PL is a LSP but not LSP is a 3PL.......To what extent do you agree/disagree with this point?
Regards.
I think there is no much difference between the two names; it depends on the context (i.e. depnds on the perspective of how you view a logistics company). For instance, if you view a logistics company from a contractual point of view, then it might be called 3PL, but if you view it from a scope/purpose, it might be called LSP.
Thank you all for asking and answering this question. I am working on a project and was looking for some clarifications which I found here. Our work is at Article An IoT-enabled Decision Support System for Circular Economy ...
Thanks.
Dear Juliat,
Both, Logistics Service Providers (LSP) and 3PL (third-party logistics) providers, are outsource entities shippers leverage to manage a company's warehousing, distribution and transportation of freight.
Basic differences are that the 3PL doesn't only take care of just logistics but has also other services integrated in the service. The 3PL targets a single function, whereas the LSP manages the entire process. LSP used for complex shipping process. 3PL provider is always integrated into the customer's system. Another differences is cost, many shippers start with the idea of integrating an 3PL logistics service provider because of cost savings, but quickly realize there are many other benefits.
LSP
Logistic service provider’s management is the outsourcing of logistics operations to a third party. Companies, or clients, use these third parties known as logistics service providers (LSPs) to provide logistics services. LSPs may provide logistic services to one or more clients at any given time. Clients may choose to outsource a portion, or all of their logistics services to one or more LSPs. In a broad sense, LSPs have a “big picture” strategy with using its top tier transportation management software (TMS) and BI (business intelligence) to maximize its people, technology, processes and knowledge of the industry for more complex shipping solutions.
3PL
Essentially, a third-party-logistics firm may behave as an external supplier they perform part of a company’s logistics functions. There are many benefits using 3PL service. 3PL service providers include coordinating vendor shipment, consolidating freight, inbound and outbound transportation, warehousing, freight bill auditing/payment, customs brokerage, freight forwarding, customs clearance etc. Role of 3PL are mainly, by outsourcing initiate logistics activities to third party logistics (3PL) provider, retailers can maximize the effectiveness of their supply chains, ensuring that customers' expectations are met store inventory and fulfillment, distribution order management, warehouse management, returns management, direct to customer order fulfillment.
Ashish
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