What is the difference between logistics service providers and 3PLs?

Logistics service providers: Logistics service providers are typically large organizations such as freight companies, airlines, shipping companies, or railway companies. They focus on providing basic logistics services such as cargo transportation, warehousing, and inventory management. These providers typically have their own transportation and warehousing facilities to better control the logistics process.
Third Party Logistics (3PL) Company: 3PL Company is an outsourcing service provider specializing in providing comprehensive logistics solutions for customers. They provide a wider range of services, including supply chain management, transportation, warehousing, order processing, distribution, and more. 3PL company does not own its own goods or transportation facilities, but collaborates with multiple customers to provide customized logistics solutions according to their needs.
2. Services Provided
Let's compare the services provided by the two in detail below.
Logistics service providers: The main responsibility of these providers is to provide basic logistics services, such as cargo transportation and warehousing. They usually have their own freight equipment and warehouses to ensure that goods can be moved and stored quickly and safely. The service scope of logistics service providers is relatively limited, mainly focusing on the physical transportation of goods.
Third Party Logistics (3PL) Company: 3PL provides a wider range of services, including supply chain management, order processing, inventory management, transportation planning and execution, etc. They collaborate with multiple clients to develop personalized solutions based on their needs. 3PL company's services are more comprehensive, and customers usually outsource all aspects of logistics to them to reduce costs, improve efficiency, and focus on their core business.
3. Responsibility and Control
Another difference lies in responsibility and control.
Logistics service providers: These providers are usually responsible for a part of the logistics chain, such as cargo transportation or warehousing. They have more direct control in these fields because they have relevant equipment and resources. Customers usually collaborate with multiple different logistics service providers to meet their different needs.
Third Party Logistics (3PL) companies: 3PL companies have a more comprehensive responsibility, as they are responsible for managing the entire supply chain or logistics process. Although the client still has a certain degree of control, more decision-making and execution work is done by 3PL company. This outsourcing model can help customers reduce management costs and reduce the burden on logistics.
4. Flexibility and adaptability
Logistics service providers: These providers are usually more flexible in providing standard services, but sometimes find it difficult to adapt to the special needs of customers. Customers may need to collaborate with multiple logistics service providers to obtain the required services, which may lead to some coordination and management challenges.
Third Party Logistics (3PL) Company: 3PL Company is renowned for its comprehensiveness and customization, which can better adapt to the special needs of customers. They typically have more powerful technology and management tools that can provide customers with more comprehensive data and insights to support decision-making and efficiency improvement.
5. Costs and Benefits
Logistics service providers: Logistics service providers typically have relatively low costs as they mainly provide basic services. But customers may need to invest more time and resources to coordinate different service providers to ensure the coordinated operation of the entire logistics process.
Third party logistics (3PL) companies: Although 3PL companies typically have higher service fees, customers can benefit from higher efficiency, better visibility, and better supply chain management. This can help customers reduce overall logistics costs and gain better value.
6. Applicability
Finally, the applicability of the two is also different.
Logistics service providers: Logistics service providers are usually suitable for enterprises that require basic logistics services and have confidence in their ability to manage and coordinate logistics. These service providers typically have higher efficiency in fast transportation and storage.
Third party logistics (3PL) companies: 3PL companies are more suitable for enterprises that want to focus on core business and outsource logistics to professional companies. Especially small and medium-sized enterprises and those with complex supply chain management needs can benefit from 3PL's services as they can provide more comprehensive solutions.