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Definition of Third Party Logistics Company (3PL) in 100 Words Blog Feature
Rick LaGore

By: Rick LaGore on June 12th, 2019

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Definition of Third Party Logistics Company (3PL) in 100 Words

3PL | logistics | third party logistics

Definition of Third Party Logistics Company (3PL) 

A third-party logistics company (3PL) offers outsourced logistics and supply chain service solutions for shippers.  A company can outsource all or just a portion of their logistics requirements.

According to Armstrong & Associates the third party / contract logistics market size is $184.3 billion.

90% of Fortune 500 Companies utilize a 3PL in their logistics and supply chain strategy.

3PL Logistics Video

Third Party Logistics Services:


When companies outsource logistics functions, they can either choose a single service or bundle the above services to craft a customized logistics services solution that best fits their company's needs.

Third Party Logistics Benefits:

  • Cost Savings

  • Reduce Capital Requirement

  • Scale & Flexibility

  • Gain Expertise & Knowledge

  • Technology

Third party logistics service relationships can be:

  • Transactional
    • The 3PL is used on an as needed basis with no long-term contract.
  • Tactical
    • The shipper and 3PL have a negotiated long term agreement outlining services and prices.
  • Strategic
    • The shipper and 3PL have a negotiated long term agreement outlining service management fee, with a pass through on all costs making for a fully transparent relationship.

Professional Organizations Associated with 3PL's:

Other Articles of Interest:

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About Rick LaGore

Rick is the co-founder and CEO of InTek Freight & Logistics, a company focused on being the place where companies come when faced with a logistics problem.

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