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4. The Transportation Services Market

The market for transportation services is characterized by a diverse as-

sortment of providers. They range from the asset-based third-party logis-

tics service provider that is fully responsible for performing the full

realm of logistics services, to the non-asset-based broker that maintains

relationships with asset-based providers and subcontracts the work. The

presence of such a diverse array of service providers in the transporta-

tion market asserts that each has a valuable role to fulfill in the market-

place. Furthermore, the introduction of the Internet and other advanced

technologies has introduced new forms of providers in the market. This

chapter illustrates some of the different forms of service providers found

in domestic and international service arenas.

Private Transportation

The first option available for a shipper interested in transporting goods

from one place to another is to do it in-house. This is also called private

transportation. Private transportation employs one’s own means to move

freight. Technically, it is defined as not-for-hire transportation of a firm’s

goods, with the firm also owning (or leasing) and operating the trans-

portation equipment for the furtherance of its primary business. This

means that, typically, private carriers do not provide freight services to

the general public (although they are allowed to do so in many nations).

Formally speaking, to be considered private, the company cannot be in

the business of transportation as a primary form of business. Private op-

erations are found in the different modes of transportation.

Private Road Fleets

By far, the most common form of private transportation among shippers

is found in road transport. Back in the days of regulation, more compa-

nies had private road-based fleets. The reason for this is rather intuitive:

When markets offer sufficient options and competitive prices, private op-

erations are less appealing because shippers can buy flexibility at a lower

cost, without the distraction from the primary business. However, be-

cause markets were tightly controlled during regulation and prices were

rarely (if ever) market driven, private fleets were financially worthwhile.

In the modern business world, the value of private fleets has diminished

somewhat, with so many carriers competing aggressively for business in

the marketplace. Nevertheless, some companies continue to maintain

fairly substantial private fleets for internal (and sometimes external) use.

It is estimated that there are more than 33,000 private fleets of ten vehi-

cles or more in the U.S. alone. Table 4-1 provides a listing of the largest

private fleets in the United States, along with the number of vehicles in

each (as of 2013).

Source: http://fleetowner.com/%5Bprimary-term%5D/2013-flee-

towner-500-1-99.

Table 4-1 The Largest Private Fleets in the United States

Companies ranging from small retailers to global corporations often own

a fleet of private road vehicles. For example, Walmart has a captive pri-

vate fleet of more than 6,000 tractors and 55,000 trailers, which together

drive more than 750 million miles annually. Similarly, companies such as

PepsiCo and Comcast operate substantial private fleets to service their

stores, distribution centers, and customer locations. In the recent past, the

trend has been to move away from having a private fleet, but there are

still some advantages to operating a private road fleet.

Advantages of Private Road Fleets

Arguably, the advantages of owning and operating a private fleet have di-

minished substantially following the deregulation of the freight business,

but some advantages still make it worthwhile for companies to operate

their own fleets. This is especially true when the volume of transport re-

quired is high. The first advantage relates to potential cost benefits.

Rarely do private-fleet operators claim cost savings as the primary reason

for running a private fleet, but in some cases, private fleets can provide

the shipper with substantial cost benefits over shipping purely through

public carriers. This is because such shippers get a credible in-house ship-

ping solution, and potential transporters and trucking companies then

need to compete with this in-house option to gain the shipper’s business.

The shipper is guaranteed the best rates in the open market. In addition,

large carriers often return empty from a delivery run (also called dead-

heading), and this cost is baked into the price quote provided to the ship-

per. Owning a private fleet allows the shipper to pick up shipments from

suppliers on the way in, thus providing a cost-effective and environmen-

tally friendly transportation solution for inbound shipping.

Another cost advantage that private fleets provide is that they allow com-

panies to keep their landed costs of goods lower than that of the competi-

tion. Walmart, for example, uses its extensive private fleet to collect ship-

ments from suppliers on the way back from the retail store to the distri-

bution center. Because most shippers use volume of product in freight

lanes as leverage when negotiating freight rates with carriers, Walmart is

“pulling” freight volume away from these shippers’ freight lanes (by tak-

ing over inbound shipping), which lowers the shipper’s volume discounts

and thereby increases their shipping rates on the remaining shipments.

These cost increases then get passed on to other retailers, thereby giving

Walmart a substantial cost advantage over the competition.

In addition, in some cases, private fleets are worthwhile simply because

of the nature of the cargo or the business. Some shippers have cargo that

does not fit neatly into a single category; in such cases, common carriers

often end up filing incorrect claims reports. Having a private fleet elimi-

nates this problem. Similarly, when a shipper operates a private fleet,

drivers are not merely people who move goods from place to place any-

more, but they also act as representatives of the company and, in some

cases, even salespeople. Given how much face-to-face contact drivers end

up having with downstream channel partners, drivers often become a

shipper’s best customer service representative. In addition, some ship-

pers feel that highly visible branding on their private fleets rolling down

interstate highways provides them with a free billboard, reminding cus-

1

tomers of their products and services. In fact, the average truck in an ur-

ban area generates an estimated 12,000,000 “viewer impressions” per

year.

Some shippers use private fleets because of the comfort they provide in

terms of control and guaranteed capacity. (This is especially true in the

market of perishable goods.) During peak shipping seasons, it might be

hard for a shipper to obtain the necessary capacity in the common carrier

market. Controlling a private fleet provides the comfort and convenience

of knowing that freight can get to its intended destination in time.

Finally, private fleets afford a level of security that for-hire carriers find

difficult to match. Because private fleets are dedicated to serving the com-

pany, they are fully aligned with the interests of the company. This in-

cludes the safety and security of the loads. Shippers of highly valuable or

dangerous cargo often elect to handle transportation through private

means. This is true of most companies active in “cash logistics,” such as

Brinks, Dunbar Armored, and Garda, which specialize in the transporta-

tion of money and other valuables.

A middle-ground approach that is gaining much credence is the dedicated

fleet service. For-hire carriers offer dedicated fleets that look and act as if

they were the shipper’s private fleet. In some cases, a for-hire carrier ac-

quires the trucking assets and even the labor force once it is employed by

the shipper, assuming operations and charging the shipper for the ser-

vices. Such an arrangement enables the company to combine the benefits

of private fleet ownership with the freedom to focus on the company’s

core (nontransportation) business. Many dedicated fleets maintain the

appearances of the shipper, including having the company’s logo embla-

zoned on the trucks and trailers, and even having drivers appear and act

as if they are employed directly by the shipper. For example, Exel

Logistics provides home and office delivery for different retailers. In the

eyes of customers, Exel delivery people appear to be employees of the re-

tailer—they are knowledgeable about the products and can install house-

hold appliances on behalf of the retailer. In sum, dedicated services offer

an alternative to private fleets and traditional for-hire services to ship-

pers that are large enough to garner the interest of carriers that can pro-

vide the service.

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3

Other (Nonroad) Private Fleets

As discussed, private transportation almost exclusively refers to private

road fleets because most other forms of transportation are almost exclu-

sively on a for-hire/common carrier basis. Exceptions do exist, however,

including the quasi-private ownership of privatized railroad. As such,

there are no private railroads in the United States, in the true sense of the

term. However, the industry does follow the practice of having private

railcars hooked onto and moving by way of common-carrier railroads. In

fact, as of 2008, more than 50 percent of the freight-tons shipped on the

North American railroads were moved in cars owned by nonrailroad

leasing companies and shippers (private railcars). A similar idea is used

in water-based transport, where private ownership is typically restricted

to barges rather than actual powered vessels. Large companies in the

agricultural and energy sectors often maintain their own ports, particu-

larly on rivers and lakes, for dispatching and receiving cargo.

Pipeline transportation is not common among shippers, but this mode is

often owned and operated by companies for private use. Technically, the

pipelines are considered to be common carriers in the United States, al-

though it is not practical for other firms to use another company’s pipe-

line. Finally, private air carriers are almost exclusively used for transport-

ing people, not freight.

Outsourcing Transportation

The second option available to a shipper who chooses not to engage in

self-transportation of goods is to outsource the activity to transportation

specialists. In such cases, a shipper might choose to hire the services of a

third-party logistics (3PL) firm or to go directly to a carrier (such as a

truckload or less-than-truckload carrier).

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5

Contract Carriage (2PLs)

As Chapter 2, “A Survey of Transportation Modes,” explained, several

types of specialized service providers handle freight movement. Asset-

based carriers (meaning freight companies that own trucks, tractors, and

so on) that engage in the movement of freight and sell their services di-

rectly to customers fall into this category. As we have seen, in road-based

transport, these are classified as truckload (TL) and less-than-truckload

(LTL) carriers. Similarly, in ocean shipping, these are liners and tramp

services. Some shippers choose to deal directly with such service

providers, who are also called 2PLs (second-party logistics service

providers). In many cases, larger shippers deal directly with such 2PLs

because of their buying power and large volume discounts. Smaller ship-

pers often must work through brokers and intermediaries because of

their smaller volumes and lack of buying power in the market. This cre-

ates a market for intermediaries such as 3PLs, 4PLs, freight forwarders,

and brokers.

Third-Party Logistics Providers (3PLs)

Basically, a 3PL provider can be defined as an external supplier/vendor

that performs all or part of a company’s logistics functions. The 3PL side

of the freight business is one of the fastest growing aspects of transporta-

tion: Between 2010 and 2011 alone, the overall global 3PL marketplace

grew from an estimated $541.6 billion to $616.1 billion—a growth of al-

most 14 percent in one year. More than 86 percent of U.S. Fortune 500

companies use outsourced 3PL services. This growth in the 3PL market-

place is applicable not just in the United States, but all over the world; the

Asia-Pacific 3PL marketplace has been growing at an annual rate of 14

percent since 2006. Table 4-2 lists the top ten 3PLs in the world.

Table 4-2 The Largest 3PLs in the World (As of May 2012)

Three factors are frequently credited with the advent of the so-called

“one-stop shop,” or the comprehensive, multifunctional 3PL. The first fac-

tor is the heightened strategic importance of logistics. Through strategic

6

7

8

initiatives such as just-in-time (JIT) inventory systems and efficient con-

sumer response (ECR), which gained popularity in the 1980s and 1990s,

companies sought advanced logistics expertise and capabilities that were

not found in shipper organizations. Out of this need, traditional logistics

service providers, such as warehouse operators, transportation carriers,

and brokers, expanded their portfolio of services to the comprehensive,

one-stop shop variety.

The second factor that supported this service evolution is massive deregu-

lation in the logistics industry, particularly deregulation of the transporta-

tion sector in the United States. The Motor Carrier Regulatory Reform and

Modernization Act of 1980 (MCA-80) was instrumental in allowing ware-

house companies to more freely engage in transportation operations and,

conversely, for transportation carriers to offer broader, integrated forms

of logistics service. Furthermore, MCA-80 allowed creativity and innova-

tion to enter the logistics industry following nearly a century of increas-

ingly restrictive regulation. Deregulation is credited with inciting similar

market freedoms in settings outside the United States as well, and rein-

forcing development and adoption of outsourced logistics services in

these various settings.

A final yet key factor that has contributed to the growth of 3PLs is in-

creased competition and globalization in the twenty-first century.

Booming world trade has fostered longer and more complex supply

chains which, in turn, have created a pressing need for better logistics in

all corners of the world. For example, cities such as Coimbatore in India

and Chittagong in Bangladesh house several small workshops and facto-

ries where several of the world’s leading brands source garments.

However, in many of these places, the logistics infrastructure can be quite

primitive. The major retailers and manufacturers outsourcing to these

factories are using their relationships with large 3PLs to control how

their overseas vendors perform their logistics. Similarly, growing pros-

perity in rapidly developing parts of the world, such as Asia, Africa, and

Eastern Europe, is building thriving consumer markets. Large manufac-

turers in Europe, the United States, and Japan want to ramp up their ac-

tivities in these regions to position themselves for this new wave of con-

sumerism. To accomplish this, they often turn to specialist 3PLs to gain

access to those markets. As such, 3PLs can be thought to fall under two

broad categories: asset-based and non-asset-based:

Asset-based 3PLs—Asset-based 3PLs own and operate the elements of

the supply chain being used to service logistics needs. These providers

generally own warehouses, support equipment, and, most important,

over-the-road equipment such as transport trucks. They market their ser-

vices directly to shippers and seek to utilize their own elements in the

supply chain, such as their own transportation vehicles and warehouses.

They commit to serve the customer and, by virtue of performing the ser-

vices themselves, are directly accountable to customers for the service

they provide, including responsibilities for over, short, and damaged

(OS&D) claims.

Non-asset-based 3PLs—Unlike asset-based 3PLs, non-asset-based 3PLs

do not own the assets necessary to manage transportation. Thus, instead

of offering use of their tangible assets (such as trucks, trailers, and ware-

houses), non-asset-based 3PLs offer their skills and expertise in finding

the best providers for all these activities, negotiating contracts with these

vendors, and implementing the solution. In essence, non-asset-based 3PLs

are more like transportation consultants than actual freight movers.

Distinction must be made, however, between brokers and non-asset-

based 3PLs because 3PLs often assume primary liability for cargo claims

and indemnity arising from losses and damages. It is critical that such un-

derstanding be achieved in all contractual service arrangements with

non-asset-based service providers who will ultimately subcontract the

work to asset-based carriers.

Choosing between asset-based and non-asset-based 3PLs—

Considerable debate arises on the advantages and disadvantages of asset-

based versus non-asset-based 3PL service providers. Each shipper has dif-

ferent needs, so no single approach applies to all shippers. Most shippers

typically look for a combination of one or more of the following factors in

making their choice on asset-based versus non-asset-based 3PL partners:

Cost—Eventually, one of the key reasons that shippers choose to engage

a 3PL in the first place is to be able to serve their customers (current and

future) as effectively as possible at the lowest cost. Therefore, potential

cost savings provided by the 3PL are an important aspect of the overall

decision framework for most shippers. Given that asset-based 3PLs own

some or all the physical assets necessary to the transportation require-

ment, they can sometimes offer a lower cost on warehousing and trans-

portation: They set their own pricing and are not paying an outside party,

such as a motor/rail carrier or warehouse operator. This is especially true

if the non-asset 3PL does not have the buying power when it comes to

buying the provisions of transportation and warehousing capacity.

Flexibility—The advantage sometimes enjoyed by asset-based 3PLs can

be potentially negated because of the second dimension: flexibility. Asset-

based 3PLs use their own assets, such as trucks, trailers, and warehouses,

to move the shipper’s freight, so they are sometimes constrained in terms

of the range of solutions they can provide. Non-asset-based 3PLs, how-

ever, can work with shippers to identify the best-in-class solutions to

meet the shipper’s needs. Of course, asset-based 3PLs that are large

enough often have enough options within their own system to be able to

accommodate all the flexibility that a shipper needs, so that point then

becomes irrelevant. From an economics perspective, however, develop-

ing expansive capabilities and capacities comes at a cost. Asset-based

providers have bills to pay whether the diverse assets they own are fully

or partially utilized. Hence, asset-based providers must charge prices that

ensure profitability whether assets are employed fully or not, meaning

that flexibility comes at a price.

Continuity—Asset-based 3PLs are often considered more stable than

non-asset-based 3PLs. There is some truth to this belief: The current

surety bond for beginning business as a 3PL is merely $75,000, and often

some 3PLs are little more than a small office with a skeletal staff, a phone,

and an Internet connection. This lack of an entry barrier makes it easy

for fly-by-night non-asset 3PLs to easily close up shop, leaving bills un-

paid and customers hanging. Thus, the pressure on the shipper is some-

times higher when hiring a non-asset-based 3PL (especially a new one).

Lead Logistics Providers/Integrators (4PLs)

The explosive growth in the 3PL marketplace across diverse operating ge-

ographies has given rise to firms that often have relations with multiple

3PLs at a time. For example, as of 2013, Procter & Gamble and Walmart

maintain relationships with more than 50 3PLs each. Often these 3PLs

manage different subsegments within a transportation network. This

problem is more prevalent in some industries. For example, the grocery

retailing business is known for supply networks that are highly regional-

ized, to more quickly source a wide array of local specialties just-in-time.

In such a case, grocery firms are highly decentralized and operate on dif-

ferent enterprise systems with their 3PLs in every market they serve.

This has given rise to a market for a new type of freight intermediary: a

fourth-party logistics service provider (4PL), also sometimes called an inte-

grator. A 4PL is a logistics management service that does not touch or run

logistics services itself. Instead, it manages multiple 3PLs and freight

providers on behalf of the vendor. Given how new the term is, some am-

biguity surrounds the meaning of the term itself, and this will probably

be the case for some time. Therefore, in this text, we prefer to stick with

the following definition of 4PLs: logistics intermediaries that are charged

with coordinating the operations of a collection of logistics service

providers. Obviously, a 4PL is a highly specialized and complex trans-

9

portation intermediary, not one that many businesses (especially small

and medium ones) immediately require.

A distinct form of service provider is the lead logistics provider (LLP).

Unlike the 4PL, the LLP can be an asset-based provider that actively man-

ages the freight. The LLP serves as the primary owner of the relationship

with the shipper, yet it hires additional carriers and logistics service

providers to conduct operations in support of the shipper. Such arrange-

ments are quite common in the inbound side of automotive manufactur-

ing. Automotive manufacturers often hire a single large 3PL to serve as

the LLP. This LLP coordinates the inbound logistics system, arranging the

flow of parts and components to feed manufacturing. This 3PL performs

some of the operations itself and hires out for the rest, assuming respon-

sibility for the performance of the entire inbound system. Similar ar-

rangements are found around in the world in fashion, electronics, phar-

maceutical, and chemical manufacturing and distribution.

Freight Forwarders

To understand who freight forwarders are, we need to explore both the

technical definition and then services provided. The U.S. Federal Motor

Carrier Safety Administration (FMCSA) defines a freight forwarder as fol-

lows: a person or entity holding itself out to the general public (other than

as a pipeline, rail motor, or water carrier) to provide transportation of

property for compensation in the ordinary course of its business such

that it does the following:

1. Assembles and consolidates (or provides for assembling and consoli-

dating) shipments, and performs (or provides for) break bulk and distri-

bution of the shipments

2. Assumes responsibility for the transportation from the place of receipt

to the place of destination

3. Uses any part of the transportation of carrier subject to jurisdiction un-

der this subtitle

In essence, freight forwarders are logistics service providers that serve as

intermediaries between the shipper and the carrier, and that can carry

out several different activities for shippers. First of all, most freight for-

warders have some method of storing the client’s cargo at their own

warehouses or affiliated warehouses. Along with storing goods, freight

forwarders sometimes can sort, consolidate, and break bulk; negotiate

freight rates with shipping lines to cover the interests of their clients;

10

book the cargo with the shipping line; and prepare shipping documents,

such as bills of lading.

A key point to note (and this is what sets freight forwarders apart from

other intermediaries, such as freight brokers) is that freight forwarders

are authorized to issue their own bills of lading. In addition, in the United

States, freight forwarders have primary liability to the shipper for cargo

loss and damage, just as any receiving carrier has. This means that freight

forwarders have full responsibility (and liability) for the shipment from

the time of initial receipt to final delivery. In addition, their special status

as a freight intermediary means that they are responsible for payments to

the carriers. Thus, in effect, freight forwarders are the true intermedi-

aries of the freight business because they act as shippers vis-à-vis the car-

rier, and carriers vis-à-vis the shippers. This is why freight forwarders

must carry cargo and liability insurance policies equal to at least the min-

imum coverage amounts required for carriers.

In the United States, freight forwarders need to be registered with the

FMCSA. Some freight forwarders might also be affiliated with organiza-

tions such as the International Air Transport Association (IATA).

Generally, freight forwarders have large-scale relationships with both

ocean freight and air freight carriers (although some freight forwarders

specialize in one of these categories). Because of their substantial buying

power, they usually can offer considerable cost savings to their cus-

tomers. They also can assist in choosing the right carrier for the shipment

and can handle the support documentation. Thus, from a shipper’s per-

spective, little difference exists between freight forwarders and shipping

lines themselves. Indeed, at times, shippers view freight forwarders as an

alternative shipping line.

Difference Between 3PLs and Freight Forwarders

Given our earlier discussion of 3PLs and freight forwarders, the next logi-

cal question to ask is whether there is a difference between the two.

Traditionally, the distinction between these two service providers used to

be clear: Freight forwarders moved freight from airport to airport or port

to port by using shipping and airlines, and 3PLs took care of warehousing

and distribution. Over time, however, the distinction between these two

has been blurring. Traditional freight forwarders have begun to offer a

broader array of services and have rebranded themselves as 3PLs.

Therein lies the key difference: Typically, 3PLs offer a broader array of

services than freight forwarders.

The basic difference between the two is that freight forwarders are spe-

cialists that focus on the logistics of transportation, and they provide

11

some extra services (such as warehousing, inventory management, and

documentation support). 3PLs, on the other hand, are usually generalists

who help move the goods, but their focus is not merely on goods move-

ment; they add several extra services, such as storing goods between

transport steps, processing shipments, taking items from transport vehi-

cles and packaging it with an invoice per client drop off, and providing

visibility into the channel, among a host of other activities. In addition,

freight forwarders typically focus on smaller linkages in the supply chain

instead of trying to optimize the entire supply chain. Finally, whereas

3PLs can be either asset-based or non-asset-based, freight forwarders

have traditionally been only non-asset-based (although this is changing).

So in essence, the difference is that freight forwarders have a narrower

focus on the transportation aspect of the supply chain, whereas 3PLs have

a more broad focus.

Brokers

A fair amount of confusion arises when considering freight brokers and

freight forwarders. The term freight broker means a person or entity

other than a motor carrier, or an employee or agent of a motor carrier,

who arranges for the truck transportation of cargo belonging to others,

utilizing for-hire carriers to provide the actual truck transportation.

However, the broker does not assume responsibility for the cargo and

usually does not take possession of the cargo.

Consider this easy way to understand that definition: If an entity is al-

lowed to issue a bill of lading and take over the liability for the goods be-

ing transported, that entity is something other than a broker. Stated dif-

ferently, brokers are not allowed to issue their own bills of lading with

their names in the carrier field, unlike freight forwarders. (If a shipment

is arranged with a broker instead of with a freight forwarder, the actual

carrier’s name is mentioned on the bill of lading.) In addition, brokers are

not responsible for any freight claims and can merely help in forwarding

such claims (if they occur) to the carrier for handling or compensation.

Finally, brokers do not provide any insurance coverage for the cargo.

Thus, a freight broker is merely a conduit for connecting the shipper and

carrier.

Because freight brokers take much lower amounts of liability and respon-

sibility for freight than freight forwarders, the entry barriers to this busi-

ness are also typically lower. A freight broker must be registered with the

Federal Highway Administration and must post a surety bond or trust

fund in the amount of $75,000. In addition, brokers are required to keep a

record of each freight transaction for a minimum period of three years.

These records must show the name and address of the consignor, the mo-

tor carrier, the bill of lading or freight bill number, the amount of the

broker’s compensation, a description of any non-brokerage services per-

formed in connection with each shipment or other activity, the amount of

any freight charges collected by the broker, and the date the payment was

made to the carrier.

Summary

In sum, service providers in the domain of transportation management

assume a wide variety of forms and names. These terms can sometimes

be confusing. It is critical that supply chain managers achieve clarity in

the service arrangements that they devise with different types of

providers. As the previous discussion indicated, service providers assume

different responsibilities for liability, depending on form. Understanding

and responsibly assuming risks is among the greatest concerns in trans-

portation management. Hence, it is essential that these differences are

properly acknowledged in transportation transactions.

Key takeaways from this chapter include:

The most common form of private transportation is through private

road fleets.

Contract carriage is common among large shippers because they have

regular recurring needs and considerable shipping volumes.

Factors leading to the rise of 3PLs include an increased focus on logis-

tics, deregulation, and globalization.

3PLs can be divided broadly into asset-based and non-asset-based

providers.

3PLs are typically selected based on cost, flexibility, and continuity.

Integrators/4PLs are a recent and growing intermediary.

Freight forwarders are distinct from brokers and 3PLs. All three service

provider forms fulfill unique needs for shippers in supply chain

operations.

Endnotes

1. Penn State’s Smeal College of Business, “Wal-Mart’s New

Transportation Strategy.” Business Casual. June 7, 2010.

http://blogs.smeal.psu.edu/businesscasual/2010/06/07/walmarts-new-

transportation-strategy/.

2. Statistic from Mobile Billboard Advertising.

3. John Edwards, “Private Fleets: Your Own Private Ride.” Inbound

Logistics. September 2006. Available at

www.inboundlogistics.com/cms/article/private-fleets-your-own-pri-

vate-ride/.

4. Thomas M. Corsi, Ken Casavant, and Tim A. Graciano, “A Preliminary

Investigation of Private Railcars in North America.” Journal of the

Transportation Research Forum. 2012;51(1):53-70. Available at

www.trforum.org/journal/downloads/2012v51n1_04_Railcars.pdf.

5. Depending on prevailing business practices, some firms also choose to

use the terms logistics outsourcing or contract logistics instead of 3PL.

6. Joe Lynch, “Capgemini’s 2012 3PL Study Provides Great Insights.” The

Logistics of Logistics. November 6, 2013. Available at

www.thelogisticsoflogistics.com/2012/11/capgeminis-2012-3pl-study-

provides-great-insights/.

7. Josh Bond, “3PL customers report identifies service trends, 3PL market

segment sizes and growth rates.” Modern Materials Handling. July 22,

2013. Available at

www.mmh.com/article/3pl_customers_report_identifies_service_trends_3pl_market_segment_s

8. Patrick Burnson, “The Top 50 Global and the Top 30 Domestic 3PL

Providers.” Supply Chain 24/7. March 17, 2013. Available at

www.supplychain247.com/article/the_top_50_global_top_30_domestic_third_party_logistics_pro

9. Accenture originally coined the term 4PL and registered it as a trade-

mark in 1996.

10. In some countries, freight forwarders are known as clearing and for-

warding (C&F) agents.

11. A directory of freight forwarders is available at

www.forwarders.com.