Know Your 3PL

Sept. 14, 2009
From Logistics Today's digital edition, here's some background on 3PLs

There are many definitions for what constitutes a third-party logistics provider (3PL) or a lead logistics provider (LLP). There's less agreement on what makes a 4PL (or if there is such a thing). But one thing is almost universally accepted—the relationship between a logistics provider and the user of those services is complex. Much depends on matching not only services to needs but also getting a fit on culture and values.

Logistics Today's 2009 salary survey quantified many of the characteristics of shippers, carriers and 3PLs. At the risk of over simplifying, here's how 3PLs describe themselves.

What do you do?

74% offer supply chain management services
69% offer operations management
58% manage warehouses or distribution centers
30% SaaS or hosted information services
29% global freight forwarding/customs brokerage

One of the common descriptions of a 4PL is a company providing hosted information services or software as a service (SaaS).

What do you earn?

$90,624 median base salary
Shippers reported earning $75,382
$7,894 median bonus
Shippers reported bonuses of $2,876

What's your experience?

18 years in the logistics field
7.5 years with current company
4.9 years in current position

Shippers had similar logistics experience but longer tenure at their companies and in their current position.

74% of 3PLs hold a bachelor's degree or higher.
74% of 3PLs previously worked as shippers
72% worked for a carrier
(Only 39% of shippers have worked for a carrier and only 16% worked for a 3PL.)

What's your business?

62.8% describe their business as lead logistics provider
23.3% offer distribution services.
73.6% do supply chain management services
69% operations management
58.1% facility management
30.2% SaaS or information
28.7% offer global freight forwarding/customs brokerage.

What is your company like?

76.7% are domestic US companies
20.2% have a global parent.
25.6% are publicly traded companies
73.6% are privately held.
(In contrast, shippers are 40% public and 59.8% private.)
68.2% claim no unionized workforce
14% see union penetration to 25% or less of their workforce
29.5% reported 25 or fewer employees at their location
25.6% have 100 to 500 employees

$100 million is the top revenue figure for 47.3% 22.5% earn $1 billion or more (excluding pass through funds)

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