Third Party Logistics Definition

A third party logistics provider (3PL) is a company that provides logistics services to other companies on a contractual basis. 3PLs typically specialize in one or more areas of logistics, such as transportation, warehousing, and freight management.

Third party logistics providers offer a variety of services that can be customized to meet the specific needs of their clients. These services may include transportation management, warehouse management, order fulfillment, and supply chain management. 3PLs use their expertise and resources to provide these services in a more efficient and cost-effective manner than their clients could achieve on their own.

The term “3PL” is sometimes used interchangeably with “logistics service provider” (LSP), although there are some subtle differences between the two. LSP is a broader term that can refer to any company that provides logistical services, including manufacturers, retailers, and even some transportation companies. 3PL is a more specific term that refers only to companies that provide outsourced logistics services on a contract basis.