Logistics operators, adapt to the specific needs of each client. They have different service integration. Which are internationally called XPL, where X can take the place of 1, 2, 3, 4 or 5, depending on the level of integration and PL means Logistics Provider.
The classification of the main Types of Logistics Operators:
- First Party Logistics Provider (1st PL): sends their own products from one location to another, acting as both the sender and receiver of the materials. There are many different types of businesses that are classified as 1st party logistics providers. They are, importers and exporters, manufacturers, retailers, traders and wholesalers. Even families and individuals that move from one place to another, and government departments can be found in this category.
- Second Party Logistics Provider (2nd PL): owns the means of transportation they use to distribute their products. Transportation-based businesses that fall into this category include trucking companies that lease or own their trucks, airlines that lease or own their planes and shipping lines that lease or charter their ships. If a transportation service moves materials along a specific section of the supply chain, say from a distribution center to a port terminal, it could be categorized as a 2nd party logistics provider.
- Third Party Logistics Provider (3rd PL): can help manage your supply chain and distribution needs by offering their unique services to your business. These companies offer many different logistics services, including contract management, freight forwarding, logistics optimization, management consulting, order fulfillment, transportation, warehousing and much more. Whether you only need a few services or a complete solution to your distribution and warehousing needs, a 3rd party logistics provider will be there to help.
- Fourth Party Logistics Provider (4th PL): is an independent business that offers a full-service, supply-chain solution to their clients. Along with offering this service to their clients, these providers also use the service in-house. These providers develop their own capabilities, resources and technology, and, additionally, they do the same for 3rd party providers so that they can meet the distribution needs of multiple parties. A 4th party provider integrates all of the companies along the supply chain in order to control, plan and steer all logistical procedures to better achieve long-term strategic objectives.
- Fifth Party Logistics Provider (5th PL): is much the same as 4PL, 5PL is a new term circulating within the supply chain industry. A 5PL will plan, organise and implement logistics solutions on behalf of the contracting company with a focus on utilising the most appropriate technologies. Essentially, a 5PL manages networks of supply chains with an extensive e-business focus across all logistic operations, other than 3PLs and the parent company.
These five different logistics configurations 1PL, 2PL, 3PL, 4PL, 5PL offer solutions for different types of businesses. You have the flexibility to choose which solution best fits your distribution needs. This overview has covered all five solutions, from the simplest approach to the all-encompassing, holistic approach. Every business is different; it’s your job to incorporate a logistics plan that will help you, and your business, achieve your goals.
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