Abbreviation for Lead Logistics Provider

What is an LLP?

An LLP refers to a provider whose main task consists in managing the entire supply chain for a company that wishes to outsource this activity. The name 4PL (Fourth Party Logistics) is also given to these LLP providers, who offer their services in the field of transport and the management of complex supply chains.

For years now, there have been different levels of degrees of supply chain outsourcing: 1PL, 2PL, 3PL, 4PL, 5PL and so LLP. A company that decides to outsource its supply chain activity can, nowadays, entrust all or part of this activity to an external provider specialized in the field. In the case of LLP, the company has decided to delegate the entire management of their supply chain. This includes transport management supervision, overseeing warehouse operations and 3PL management.

In practice, a Lead Logistics Provider orchestrates the entire supply chain process. They ensure proper operation within the supply chain on a daily basis on behalf of the company, who has called upon them to manage the acquisition and integration of all logistical services, amongst other tasks. The LLP acts as a sort of coordinator. They forge a link between the supply chain’s various stakeholders, whilst remaining fairly neutral.

In the face of increasingly complex supply chain operations, the number of LLPs has never ceased to rise over the last few years. Their growth is in fact intrinsically linked to the development of new information and communication technologies (NICTs), and to the boom in online trade (e-commerce). It should be noted that Lead Logistics Providers can all stand out from their competitors by showcasing their expertise in a specific field, such as procurement for production sites, the distribution of finished products to warehouses, the distribution of spare parts, digital applications, etc.

Specificities of an LLP

The LLP carries out the same tasks as a 4PL, with one difference: the 4PL only has an intellectual capital, whereas the LLP also has assets. It should be noted that like any 4PL provider, the LLP is in no way related to the transporters, logisticians and/or warehouses managers they call upon. They are free to switch to others whenever they see fit (whereas a company may be contractually obliged to keep the same transporter over several years despite service quality not being deemed satisfactory or in line with expectations).

Examples and practical applications

When a company decides to outsource its supply chain activity and call upon an LLP for its services, it benefits from several advantages, including:

  • Outsourcing of its complex supply chain operations requiring a certain know-how and substantial material infrastructures;

  • Improved service quality thanks to the 3PL and 4PL providers’ expertise and high-performance levels;

  • Access to the most recent logistical technologies, without any obligation to invest (robotics, ultra-modern warehouses, logistics innovations, etc.).

The company can stay focused on its core activity, without having to roll out human and material resources to carry out logistic operations.

Conversely, resorting to an LLP or 4PL provider means forfeiting the only remaining direct link between the company and its customers: delivery. The company no longer fully controls the quality of this service, whereas as in the customer’s mind, delivery is still associated with the company’s brand image (the customer takes no interest in knowing if the company manages product deliveries itself or subcontracts).