Types of Logistics in Supply Chain

 

1PL: 1st Party Logistics 

• The 1st party logistics to referred to a firm or individual, that has their own cargo, freight and can transport goods and merchandise from one point to another point.  

• They are the specifically the consigner of different goods and products and organizes the transport of products to their respective destinations.  

• It mainly consists of two parties that get benefit from the transaction. The manufacturer or the supplier and the person buying it. There are no other middlemen involved in the whole process. 

 

2PL: Second Party Logistics  

• A 2nd party logistics involves transport of goods from a particular transport area of the supply chain like rail, road, sea or air.  

• They are the asset-based carriers and includes like transport using ships of own lease and airlines that they are contracted with. They are mainly used for international transportation of heavy and wholesale goods and for trading purpose as well. 

 

3PL: 3rd Party Logistics 

• A 3rd party logistics is a supply chain that primarily concerns the transportation and delivery of different products but also includes various types of additional services as well. 

• The functions of 3PL include warehousing, terminal operations, customs brokerage, supply chain management and many more. It also includes logistics IT software products and analysis services, for tracking and tracing the delivery status of different products. 

 

4PL: 4th Party Logistics 

• 4th party logistics is a new concept which is coming into the market, and it involves employing an overseer for managing all logistic of a company and they are often treated as a consulting company for many supply chains.  

• They are frequently contracted with many 3rd party logistics and for maintaining neutral management and for providing feedback regarding various 3pl logistics services. 

• Therefore 4PL will include all the benefits of 3PL providers but also include: 

  • Project Management, sourcing and negotiation 

  • Logistics strategy and analytics 

  • Impartial service advice 

  • A single point of contact 

 

5PL: 5th Party Logistics 

• 5PL involves a fully integrated logistics solution to encompass the whole supply chain from beginning to end through multiple outsourced service providers.  The integration must be achieved through the application of IT solutions to provide full visibility throughout the supply chain in ‘real-time’.  

• The 5PL logistics provider would need to control the entire supply chain regardless of how many different service providers were involved. With the focus on technology the 5PL solution is best suited to e-commerce.