What is the Difference between 1PL, 2PL, 3PL, 4PL and 5PL logistics
The rise of 3PL in logistics and supply chain is now well evident but how far has 4PL developed
and what is 5PL?
A first-party logistics provider (1PL) is a firm or an individual that needs to have cargo, freight,
goods, produce or merchandise transported from a point A to a point B. The term first-party
logistics provider stands both for the cargo sender and for the cargo receiver.
A 1PL can be a manufacturer, trader, importer/exporter, wholesaler, retailer or distributor in
the international commerce field. It can also be institutions such a government department or
an individual or family removing from one place to another.
Anyone having goods moved from their place of origin to their new place is considered to be
first-party logistics provider.
A second-party logistics provider (2PL) is an asset-based carrier, which actually owns the
means of transportation. Typical 2PLs would be shipping lines which own, lease or charter their
ships; airlines which own, lease or charter their planes and truck companies which own or lease
A third-party logistics provider (3PL) provides outsourced or 'third party' logistics services to
companies for part or sometimes all of their supply chain management function.
Well known 3PLs include DHL, Wincanton, Norbert-Dentressangle, CEVA & NYK Logistics
A fourth-party logistics provider (4PL) is an independent, singularly accountable, non-asset
based integrator who will assemble the resources, capabilities and technology of its own
organisation and other organisations, incuding 3PLs, to design, build and run comprehensive
supply chain solutions for clients.
KAP Freight Solutions is a typical example of a 4PL consultancy service, with access to national
carriers at reduced rates so that maximum cost reductions are achieved through both re-
organisation of logistics and effective procurement.
Andrew Kunman of KAP places much emphasis on product configuration, assembly and
packaging process re-engineering, plus distribution reorganisation and can often achieve large
scale change without the complexity and extended timescales of technology implementation.
However, where technology is an essential component for other reasons, e.g. automated
warehousing, then Andrew can work closely with technology partners. Combining his ‘common
sense’ and down to earth approach with appropriate technology has produced results for some
customers that significantly exceeded their expectations.
www.kapfreight.com Andrew Kunman 07875 994414
A fifth party logistics provider (5PL) will aggregate the demands of the 3PL and others into
bulk volume for negotiating more favourable rates with airlines and shipping companies.
Non asset based, it will work seamlessly across all disciplines.
The central ethos of 5PL is its commitment to collaboration and to obtaining a higher degree of
resource utilisation in order to achieve savings and open up opportunities to secure the best
possible solution at minimum cost/carbon etc.,
5PL Ltd. has been active in this role for over 18 months and has experienced how the 5PL role is
developing into something approaching a virtual wholesaler and is exploiting all manner of
This is especially so for SME, who are able to reap higher profitability from selling into premium
and export markets whilst retaining their core business with multiples and mainstream
Jeff Screeton (co-founder of 5PL Ltd.) says experience has shown that the role of “control
tower” is really just the starting point. This model is a very exciting development because its
boundaries are very flexible and the opportunities for helping companies realise their potential
on the domestic and global stages are virtually limitless.
www.5pl-uk.com Jeff Screeton 07799 410050