There are several types of logistics operators and several ways to distinguish them. They can be national, international, specialized in road transport, maritime… There is, however, another way to distinguish them. Perhaps you have ever read references to 1PL, 2 PL, 3PL, 4PL, 5PL logistics operators… Today we are going to talk about them to try to clarify what these terms refer to, which at first explain very little about themselves.
Types of logistics operators
1PL or First Party Logistics usually refers to companies that deal directly with their own logistics needs, be they transportation, storage, order preparation, etc. There are also cases in which 1PL refers to companies that only subcontract the transport part, while they continue to deal with the warehouse part.
2PL or Second Party Logistics is one more step in outsourcing. As you probably guessed, as we increase the number of LP, the greater the outsourcing of client activities. Regarding the previous case, here the contracted operator already “touches” the storage part, guarding the merchandise and preparing orders, in addition to providing the means for transport.
With 3PL or Third Party Logistics we come to what is known as outsourced logistics. Here we have already reached the total or practically complete outsourcing of the logistics of the manufacturer or client. The 3PL agent provides the physical and human resources for storage, preparation of orders, and distribution of shipments.
These types of logistics operators continue to gain presence in the supply chain. Aspects such as traceability, complexity in warehouse management (such as stock control), processes are customizing, greater breadth in the types of delivery, etc. are becoming more important.
Other types of logistics operators
With the 4PL we take an important turn. In this case, these types of logistics operators are not directly in charge of the material part, but rather the design of the logistics itself and its control. They draw how the processes are going to be, detect needs and solutions, carry out consultancy tasks and evaluate the results… In other words, they make tailor-made suits for clients to respond to all their logistics.
We have said that they are not directly in charge of the material part, but they are responsible for hiring the appropriate 3PL -or several of them, according to needs, specializations, locations, etc.- to carry out this part. In this way, they do not need to have physical assets for the transportation and storage part.
5PL or Fifth Party Logistics is the union of the two previous sections: 3PL+4PL. while the 4PL has to look for another external company to carry out the physical parts, a 5PL takes care of executing these attributions itself. In this way, it becomes fully involved with the client, and becomes a privileged and strategic ally of the same. Great trust and excellent communication between the client and the logistics operator are necessary for this type of alliance to work.