Logistics demystified
Logistics Models (1PL, 2PL, 3PL, 4PL, 5PL): 1) 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. 2) 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. 3) 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. 4) 4PL ...