1.
THIRD PARTY LOGISTICS
(3PL)

2.
THIRD PARTY LOGISTICS
(3PL)
Third Party Logistics (3PL) involves using external organizations to execute logistics
activities that have traditionally been performed within an organization itself.
Organizations that provide one or many of the following logistics services:
 Transportation Management
 Public/Contract Warehousing
 Distribution Management
 Freight Consolidation

3.
THIRD PARTY LOGISTICS
Services Provided
Service Category Basic Service Specific VAS
Transportation Inbound, Outbound Track, Mode conversion
Warehousing Storage, Facility Management
Cross-dock, In transit merge,
inventory control
Information Technology
Provide and Maintain advanced
information systems
Transportation Management
systems, Warehousing
Management Systems
Reverse Logistics Handle reverse flows
Recycling, Customer returns,
Repair/refurbish

4.
THIRD PARTY LOGISTICS PROVIDERS
Types
 Transportation Based
 Warehousing / Distribution Based
 Financial Based
 Forwarder Based

5.
THIRD PARTY LOGISTICS
Advantages
 Cost Reduction
 Elimination of infrastructure
resources
 Improved efficiency, service and
flexibility
 Risk Sharing
 Focus on Core Competency  Better Cash Flows
 Freeing up resources
 Access to resources not available at
one’s own organization

6.
THIRD PARTY LOGISTICS
Disadvantages
× Loss of control over the logistics function
× Impact on in-house workforce
× More distance from clients – loss of personal touch
× Discontinuity of services of a 3PL Provider
× Differences of opinion / perception of the service level of 3PL Provider

7.
THIRD PARTY LOGISTICS
Growth Drivers in India
 Strong GDP growth  Increased FDI Inflows
 Consolidation of raw materials from
vendors
 Better Infrastructure
 Goods and Service Tax  Logistics Parks
 Entry of MNC 3PL players in India  Required focus on Core Competency

8.
THIRD PARTY LOGISTICS
The Future!
 India spends around 14.4% of its GDP on logistics and transportation as compared to less
than 8% spent by the other developing countries.
 Indian logistics market is expected to grow at a CAGR of 12.17% by 2020 driven by the
growth in the manufacturing, retail, FMCG and e-commerce sectors.
 3PL logistics market in India is expected to be worth US$ 301.89 billion by 2020.
 The industry as a whole has moved from being just service provider to the position where
they provide end to end supply chain solutions to their customers.

9.
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