• Dolphin Sea Air<br>Services Corporation
  • Top Forwarder<br> in Vietnam

What are 1PL, 2PL, 3PL, 4PL, 5PL?

What are 1PL, 2PL, 3PL, 4PL, 5PL?

1PL - First-Party Logistics

An enterprise that sends goods or products from one location to another is a 1PL. For example, a local farm that transports eggs directly to a grocery store for sale is a 1PL.

2PL - Second-Party Logistics

An enterprise that owns assets such as vehicles or planes to transport products from one location to another is a 2PL. That same local farm might hire a 2PL to transport their eggs from the farm to the grocery store.

3PL - Third-Party Logistics

In a 3PL model, an enterprise maintains management oversight but outsources operations of transportation and logistics to a provider who may subcontract out some or all of the execution. Additional services may be performed such as crating, boxing, and packaging to add value to the supply chain. In our farm-to-grocery store example, a 3PL may be responsible for packing the eggs in cartons in addition to moving the eggs from the farm to the grocery store.

4PL - Fourth-Party Logistics

In a 4PL model, an enterprise outsources management of logistics activities as well as the execution across the supply chain. The 4PL provider typically offers more strategic insight and management over the enterprise's supply chain. A manufacturer will use a 4PL to essentially outsource its entire logistics operations. In this case, the 4PL may manage the communication with the farmer to produce more eggs as the grocery store's inventory decreases.

5PL - Fifth-Party Logistics 

A 5PL provider supplies innovative logistics solutions and develops an optimum supply chain network. 5PL providers seek to gain efficiencies and increased value from the beginning of the supply chain to the end through the use of technology like blockchain, robotics, automation, Bluetooth beacons, and Radio Frequency Identification (RFID) devices.

 

As we progress through the spectrum of logistics models from 1PL to 5PL, it's clear that more and more of the logistics function is in the hands of the provider rather than the enterprise itself. The most common models now are 3PL and 4PL and we'll look at how each one can help solve supply chain challenges.

Source: warehouseanywhere.com 

Related news

A lot of clients become "confused" when they have to distinguish and select between "inter..
No Fee Term Explanations 1 Ocean Fre..
Bản sửa đổi các Điều kiện Thương mại Quốc tế 2020, gọi tắt là Incoterms 2020, chính thức có hiệu lực..

Featured News

Vietnam’s exports maintained a positive growth rate in the first five months of 2021. However, speci..
On the morning of June 4, 2021, the 8th Congress of the Hanoi Young Business Association (HANOIBA), ..
Dear Our Valued Customers and Partners, Due to the complicated and serious situation of the Covid..