Third Party Logistics and Beyond

ABSTRACT: A transportation revolution occurred forty years ago with the deregulation of the industry, particularly in the United States. With the deregulation complete, the transportation industry has been slow in developing a total customer satisfaction environment particularly in terms of the industry-wide total-customer package. The bulk of the transportation service offered in the U.S. has not exceeded third-party logistics (3PL). Since our barriers for entry are low and at times non-existent, what roadblocks hamper U.S. transportation companies from developing services that its global competitors already offer its customers? The end game of supply chain logistics is to augment customer value (Bowersox, Closs, Stank, 2000). This paper aims to identify what obstacles have prevented transportation companies from transforming into fifth party logistics (5PL) providers who can ensure optimum customer service by resolving fundamental logistical problems efficiently. The transformation into 4PL or 5PL can help current 3PL transportation and other companies to provide maximum benefits to customers by resolving complex supply chain issues, improving warehouse technology, increasing efficiency in transit times and creating a seamless process through the use of information technology (IT).

KEYWORDS: Supply Chain Management, Logistics, 3PL, 5PL, Transportation, Evolving logistics systems