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Air Cargo Management-13
Yoon Seok, Chang School of Air Transport, Transportation & Logistics, KAU Email: yoonchang@kau.ac.kr

1

Why Use 3PL’s?
• Save time
– Don’t need to invest in: Trucks, Training, Development

• Narrow your focus
– Allows you to focus on your strengths

• Reach more customers more effectively
– Can ensure delivery times – can help a company run leaner

Types of 3PL Providers



– – – •

Transportation Based Services extend beyond transportation to offer a comprehensive set of logistics offerings. Leveraged 3PLs use assets of other firms. Non-leveraged 3PLs use assets belonging solely to the parent firm. Examples: FedEx Logistics, UPS Logistics

Financial Based – Provide freight payment and auditing, cost accounting and control, and tools for monitoring, booking, tracking, tracing, and managing inventory. – Examples: Cass Information Systems, CTC, GE Information Services, FleetBoston

Types of 3PL Providers
• Warehouse/Distribution Based – Many have former warehouse and/or distribution experience. – Examples: Exel, Caterpillar Logistics, IBM



Forwarder Based – Very independent middlemen with forwarder roles. – Non-asset owners that provide a wide range of logistics services. – Examples: AEI

Types of 3PL Providers
• Information Based – Significant growth and development in this category of Internet-based, business-to-business, electronic markets for transportation and logistics service

Levels of Outsourcing
• Transactional Outsourcing: Based on transactions, with no long term contracts and no bonding between the 3PL and the outsourcing company. • Tactical Outsourcing: Outsourcing on a long term basis with negotiated contacts and integrated IT systems to facilitate free information flow and create supply chain visibility. • Strategic Outsourcing: Based on long-term relationships with successful

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