What is Third-Party Logistics?
Third-party logistics (3PL) originated with the United States Military, which developed the first logistics systems for managing and deploying large volumes of supplies and troops. During the middle and later 1990s, private companies discovered the benefits of hiring outside, or third-party, logistics experts to manage the total flow of products from raw materials to finished goods. Recognizing the value of strategic business counsel, companies utilizing third-party logistics providers have become more efficient, competitive and focused on their core competencies. Logistics . . . An Enormous Industry • The cost of logistics in the United States was $1.183 trillion in 2005; 9.5% of the gross domestic product or “GDP”. (Source: Council of Supply Chain Management Professionals 2005 Annual State of Logistics Report) • U.S. expenditures on logistics are larger than the national GDP of all but 12 countries. • U.S. transportation costs alone, $744 billion, are larger than the GDPs of all but
