Describe the categories of 3PL providers

Answer 1

Transportation Based: These 3PLs trace their origins to freight movement via truck, rail, air, or other modes of transportation. As customer requirements expanded, these transportation companies developed 3PL subsidiaries or major divisions to provide a broader set of capabilities to serve the marketplace. Not only do these organizations move freight, they may also manage transportation operations on behalf of customers, provide dedicated contract carriage, operate fulfillment centers, and develop logistics solutions, among other services. Some of the services provided by these 3PLs leverage the transportation assets of their parent companies, while other are rely upon the assets of other companies. In all instances, these firms extend beyond the transportation activity to provide a more comprehensive set of logistics offerings.
Distribution Based: These 3PLs suppliers originated from the public or contract warehousing business and have expanded into a broader range of logistics services. Based on their traditional orientation, these types of organizations are heavily involved in logistics activities such as inventory management, warehousing, and order fulfillment. Some have added transportation services to assist customers with the coordination, optimization and execution of shipments via all modes. The combination of distribution and transportation capabilities creates a one-stop integrated logistics service offering so that customers have the option of working with a single 3PL. These providers have significant experience in managing the logistics operations of the parent firm and, as a result, prove to be very capable providers of such services to external customers. While the idea that a 3PL firm may emerge from a corporate logistics organization is an interesting one, not all of these conversions have resulted in commercially-successful 3PLs.
Forwarder Based: This group of 3PLs includes freight forwarders, brokers, and agents that primary facilitate the flow of goods on behalf of customers. Though these companies do not own equipment, they arrange transportation services for LTL shipments, air cargo, and ocean freight, as well as providing other transportation related services. Many are engaged in the support of international freight movement, booking cargo space with carriers, arranging freight movement to/from carrier facilities, preparing and processing documentation, and perform related activities.
Financial Based: This category of 3PL providers helps customers with monetary issues and financial flows in the supply chain. Their traditional roles include freight rating, freight payment, freight bill auditing, and accounting services. Some of the financial based 3PLs have added information systems tools to provide freight visibility (e.g., tracking and tracing capabilities) and assist customers with electronic payment, carrier compliance reporting, and freight claims management.
Information Based: The Internet has provided an excellent platform for the growth of information based 3PLs. These companies have digitized many activities that were previously performed manually or required the use of licensed software. Today, these information based 3PLs provide online freight brokerage services as well as cargo planning, routing, and scheduling. They also offer companies access to transportation management systems, warehouse management systems, and performance management tools via the Internet on a per use basis. This software as a service capability allows customers to avoid the high cost of licensed software implementation, instead paying for access on a variable cost basis. Though many information-based 3PLs have come and gone during the Internet era, a few strong players have emerged.