3PLs Upgrade, Become 4PLs

In a move certain to raise the stakes in the world of logistics outsourcing, 3PLs have announced their intention to become 4PLs in the near future. Outsourcing insiders acknowledged that the growing complexity of demands placed on them had made it difficult, if not impossible, to handle the ever-increasing workload. Thus, third-party providers had no choice but to themselves turn to outsourcers for help. With these fourth-party logistics providers now doing the bulk of the work, 3PLs recognized that their best opportunities for growth were to acquire the 4PLs. Industry analysts have expressed concern about the potential for “outsource creep,” as a number of the 3PL-owned 4PLs have turned to 5PLs for increasingly specialized logistics processes. In at least one well-documented case, a sixth-party provider was unable to determine for whom it was actually performing work. Fortunately, an outsourcer filled the gap by tracking the firm’s contracts back to their source. This 7PL was shocked to discover that the 6PL was contracted by a 5PL to support the customers of a 4PL who — well, to make a long story short, the original manufacturer was unaware it was actually shipping orders to itself. On a positive note, the manufacturer had very low costs, having outsourced its entire operation.

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