Emerging trends in third party logistics (3PL) in Indian auto industry

Abstract

Third party logistics (3PL) is a growing practice in the supply chain sector where one or more logistics function of a firm is outsourced to a third party logistics provider. Based on the complexity and range of functions they perform, they can be classified into the following four types. (i) Standard: The basic form of 3PL involving activities like pick and pack, warehousing and distribution. (ii) Service Developer: Added to the basic functions mentioned above, certain value added features like tracking & tracing, cross-docking, specific packing and providing security-systems. (iii) Customer Adaptor: At the request of the client, they take over the company’s logistics activities. (iv) Customer Developer: 3PL provider collaborates with the client, integrates services and takes over the entire logistics function of the company On a global level, the industry-wise use of 3PL is given below. We find that technology, automotive and FMCG sectors are the major employers of 3PL services.