Is It True?
We came upon the UPS website and found a several web pages where UPS presents its 4PL services. So we have to ask the question: Is UPS a 4PL? Well clearly, they have assets, which by definition would make them a 3PL. However, they may offer some pure information services for supply chain and in this sense they could be a 4PL. However, we think it unlikely. The internal incentives within UPS are to utilize its investment in its assets.
UPS’s website where they tout their 4PL capabilities.
4PL As a Buzzword
This is actually what we warned about in our previous post. That is, if the term 4PL is allowed to be hijacked by marketing and PR departments of the 3PLs, then the word will cease to have any meaning. 3PLs don’t like the term 4PL, because they see it as encroaching on their space. That is unfortunate, because the supply chain business is in desperate need of pure information management companies and platform builders. UPS for all of its technological prowess, will never be a technology company first. Furthermore, a true 4PL will have no assets and thus will not be “competing for business.” That is tying to move freight onto their assets.
No 3PL Can be A 4PL
UPS is not alone in trying to brand itself as a 3PL. Many 3PLs have done this on their website. However, there is a problem because the definition of a 4PL is that you manage 3PLs. Thus, a 3PL can not manage other 3PLs becauase it has a built in bias….it wants to take the business from the other 3PLs. This is an elementary statement, and is close to impossible to contradict. This would be like two football teams “cooperating” with one another, while both team wants to win. There can be no cooperation because one side has to lose and one side has to win. So do what we do when we arrive at a 3PL web page that discusses 4PL services, or when you meet a representative from a 3PL who talks about 4PL. Ignore it or the person making these statements.
Note to 3PLs
There is nothing wrong with being a 3PL. UPS is one of the best, and they should try to get even better in their space, rather than trying to be something they are not.
Note to Those Evaluating 4PLs
The definition of 4PLs is very simple. If a company controls assets, then they are a 3PL. If they do not then they may be a 4PL. However, a 4PL has a different hurdle to clear. To be a 4PL, the company must show extreme IT competence. They must have the ability to either build platforms, or stitch together the platforms of other software companies. Anyone can hire some people and “manage freight.” A true 4PL needs to come to the party with enabling technologies.
