1
Case 22
Caterpillar Logistics Services, Inc.
Case Objectives
1) To illustrate the importance of facilitators such as third party logistics providers (3PLs) to
manufacturers.
Problem Situation
Caterpillar Logistics Services, Inc. (Cat Logistics) is a world class third party logistics provider
(3PL). Cat Logistics is a first tier global supply chain manager, with gross revenues in 2007 of
$3.15 billion and 12,000 employees working on six continents in 23 countries. Its 110 facilities
Teaching Suggestions
Assign the following task to students. Using the Internet (which may be done within the
classroom), students are to identify third party logistics providers (3PLs), preferably companies
Case Discussion
Third party logistics providers, sometimes referred to as “3PLs” or “TPLs,” are firms that
specialize in providing logistics services to companies or organizations that are not capable or
who find it more efficient to let an outside firm perform most or all of the distribution tasks
2
In addition, many 3PL providers are linked to an effective network of reliable partners and sub-
contractors, who also help to efficiently handle the inter-firm flow of goods. Consequently, 3PL
providers may in turn spread the risks by outsourcing to their sub-contractors. The degree to
which manufacturers rely on 3PLs varies greatly with relationships being anywhere from a single
transaction to long-term, strategic alliances. With continued pressure on firms to reduce costs, it
is likely that the role of 3PLs will continue to grow for some time.