3PL, 4PL, 5PL and… C3PO? “These are not the Droids you are looking for.”

by Brooke Anderson on 2011-07-12

3pl vs 4pl If you’ve ever spent time talking to a car nut, I.T. professional, or any 12 year old, you get the distinct feeling English is no longer your first language. Like when watching Star Wars (“Star what?” My nephew asks me…) you would be forgiven for thinking all those noises coming from R2D2 don’t actually mean anything – similarly to someone trying to tell you 5PL is the next step in Logistics.

Let me state from the outset that I am just as guilty of using acronyms as anyone else. I like to think they fall out of my mouth, unlike others I have seen intentionally trying to baffle their peers around the boardroom table in an attempt to disguise the fact that they aren’t entirely sure what they are talking about – or are trying to smooth over the rough edges in a sales presentation. Advertising, I.T., Logistics… Acronyms are a universal phenomenon in these industries.

My beef is that Logistics is an area already fraught with difficult terminology. Many businesses could - and moreover should be utilising 3PL, but they just don’t know what it is, or how it can benefit them. Adding 4PL and now terms like 5PL only serves to alienate these vital customers further.

I did my best to explain what I think 4PL means in a video interview recently – but that’s not to say I agree with the use of the term. 3PL is enough. Its fundamental description suffices and the additional services that are added should be just that – additional. 3PL with ecommerce, 3PL with Customer Services, 3PL with reverse logistics… These descriptions are easier to understand and in turn, more accessible to those whom it matters.

Even if we all agree to let 3PL be 3PL…  am not so naïve as to think they will ever become universal. Despite the ‘Cloud’ really just meaning ‘software over the internet’ and 4PL and 5PL really just meaning ‘3PL with frilly bits’…Where there is mystery, there’s margin.

Brooke Anderson
MD - XM Developments