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Chicago 3PL / Third Party Logistics

Posted on Mon, Aug 02, 2010 @ 10:17 AM

In an increasingly explosive business, logistics providers continue to look for ways to define themselves and deliver the best services. But a lot of times these attempts to separate themself from the rest, leads to confusing acronyms that continue to be built upon year after year.

Here are two logistical terms that you need to know:

Logistics Service Provider – An LSP is really what most people would see as a traditional 3PL provider offering a combination of warehousing and transportation services or one or the other. As global and multi national providers enter the game, things have certainly changed, but the Logistics Service Provider at its core is fundamentally the same.

Lead Logistics Provider – An LLP is the new term that consultants now more frequently use instead of 4PL. At the most basic level a Lead Logistics Provider is nothing more than a Non-Asset Based 3PL, but there is certainly an emerging field of logistics providers that oversee and manage a portfolio of warehousing and transportation providers from a higher level.

At the end of the day you can call 3PL providers whatever you want but it’s still about storing and shipping things.


Chicago Freight Company


Tags: Asset Based 3PL, Non Asset Based 3PL, Third-Party Logistics, Logistic Provider

Third Party Logistics - Asset Based 3PL vs Non Asset Based 3PL

Posted on Mon, May 17, 2010 @ 07:43 AM

Chicago Public WarehouseNeill Cartage and Warehouse is Chicago's premier full service logistics, warehousing, and distribution company.  Servicing the Midwest since 1946. 


If you are not sure of what a 3PL provider is then give me a minute to clarify it.  A third party logistics service or 3pl as they are referred to, is a business that serves as a middle man.  They handle manufactures / importers freight and warehousing needs. Why would you even think about doing this? It is as straight forward as this, experience, cheaper pricing, and service. A 3pl permits a medium sized company that usually would not get decent shipping discounts from the LTL providers to now be in a position to play on an even playing field with some of its large competitors. I guess you can describe it as "Sams Club" pricing for shipping and transportation costs.

Now that we have explained what a third party Logistics Company is... should you use an asset based or a non asset based 3pl? Let's explain these one by one so that you can make an educated decision.

Asset Based 3PL

An asset based service holds many supply chain management "assets". These assets may include anything that is pertaining with supply chain management, including technology systems, truck fleets, vehicles, aircraft, warehouses, warehousing equipment, forklifts etc. As you can see you would be restricted to using the assets that this third party logistics company suggests. There is no doubt you will be better off then before, but here is the real question to ask yourself: How do I ultimately know I am getting the best value available out there?

Can you also see how this conflict of interests could pose a problem when it comes to handling claims resolution if they are using their own trucks and equipment. Pretend for a moment that if you had a claim on damaged freight, would you feel at ease with the idea that your claim would be handled in the shortest time and reimbursed for the highest value possible?

Non Asset Based 3PL

This 3PL performs all of the services of a third party logistics service such as quoting freight, scheduling pickups and deliveries, routing, and auditing, but doesn't need to own all of the transportation assets that an asset based 3PL would own. Instead, this type of 3PL usually possesses only desks, computers, and freight industry expertise. Now you can see why they are referred to as "transportation consultants".

Now this is an important point to dwell on, since a non asset based 3pl is not restricted to using any particular warehouse or carrier and generally have no ties to carriers, they are now able to use their ability to negotiate the best deal for you. Negotiations will be done with the recognized value oriented carriers that meet your criteria and then you get to decide which carriers to work with.

Since there is no conflict of interests here, there is also no anxiety about resolving any claims that you might have either. Now you can see why many companies choose to team up with a non-asset based provider. They appreciate that they now have the unlimited freedom to partner with the service providers that best meet their needs.




Tags: Asset Based 3PL, Non Asset Based 3PL, Third-Party Logistics