An overview of the different logistics 1PL, 2PL, 3PL, 4PL, 5PL

First Party Logistics (1PL)

First-party logistics (1PL) are handled directly by a company. The company does not outsource transport & logistic activity to external agencies. The company uses its assets, for instance, vehicles for logistic operations. No external vendors have been hired for these logistic operations. Logistic functions will be handled by the company’s departments.

Example:

Company A manufactures a product, this product is directly shipped to a store or customer by a company with their vehicles. 

2nd Party Logistics (2PL)

Second-party logistics (2PL) handles the transportation component & responsible for getting goods from A to B.  2PL leases ships, trucks, planes to companies. A 2PL could only transport goods over a certain part of the supply chain.  

Example:

Second-party logistics (2PL) transports products from manufacturer A to store B.

3rd Party Logistics (3PL)

Third-party logistics (3PL) offers first-stage supply chain integration in the form of warehousing includes inventory management, cross-docking, packaging & labelling, transport & freight forwarding.

A manufacturer can outsource all transport, storage, packing, and distribution of their goods using a single 3PL company.

Example:

Third-party logistics (3PL) takes all the logistic activities of company A to shift to multiple locations.

4th Party Logistics (4PL)

Fourth-party logistics (4PL) doesn’t own warehousing, it optimizes the entire supply chain which involves an independent, lead logistic provider. 4PL provider coordinates one or more 3pl provider companies to scale the service according to customer requirements.  

• 4PL has all benefits that 3PL has & also includes:
• Project handling, sourcing, and negotiation
• Logistics planning, strategy and analytics
• Service suggestions
• A single point of contact

5th Party Logistics (5PL)

5PL involves fully integrated logistics solutions to provide the whole supply chain from beginning to end to a client with outsourcing multiple services providers. Real-time visibility is the main objective achieved with the integration of IT application throughout the process. 5PL logistic provider controls the entire supply chain irrespective of multiple service providers. With the focus on technology, the 5PL solution is best suited to e-commerce.