Both the strategic and operational levels of business models and the requirements for the related logistics processes—such as whether or not to use outside logistics service providers—differ. In the process of distinguishing between various logistics models, the terms 1PL, 2PL, 3PL, 4PL, and 5PL are frequently used. What distinguishes the various notions, how do they vary, and which model works best for what situation? The solutions are given in this article.

A Quick Overview of 1PL, 2PL, 3PL, 4PL, and 5PL

Obviously, any business that produces and distributes tangible goods in addition to providing services will require logistics support. Either internal procedures or external expertise, to varied degrees of severity, can take care of this.

The degree of networking with external partners, the complexity of the supply chains, and the degree of mutual assistance and integration are the main factors that set apart the logistics models 1PL, 2PL, 3PL, 4PL, and 5PL apart.

The corresponding logistics models’ brief definitions are provided below.

1PL stands for First Party Logistics.

First Party Logistics is referred to by its acronym, 1PL. In this instance, all internal logistics procedures and activities are managed by a manufacturing company. The business handles all associated operational and administrative tasks internally, including customer relations, intralogistics, procurement, and shipment handling.
Smaller businesses with controlled operations and few regular clients are the primary users of 1PL. First-party logistics (1PL) is frequently the most apparent method of entering the market for startups with limited funding. The logistics model is modifiable at any point as the requirements become more sophisticated.

At the group level and in large organizations, 1PL solutions are also identifiable, at least in part. This is especially true when discrete subprocesses, like warehouse management or manufacturing traffic, are managed entirely on their own.

2PL stands for second party logistics.

In two-party logistics (2PL), an outside logistics service provider collaborates with the manufacturing firm. The external commissioning of particular supply chain transport activities is a common feature of 2PL models. Any form of freight or freight route, whether by air, sea, rail, or road, may be involved in this.
In addition to providing the necessary tools, vehicles, and capacity, 2PL service providers often offer their expertise managing transport procedures. For the client, this straight-forward business partnership results in long-lasting relief. 2PL is unquestionably the best option, especially for normal, recurrent logistics needs.

3PL stands for third-party logistics.

It gets even better with third-party logistics (3PL). 3PL partners execute duties that are outsourced by companies whose logistics requirements become too complex to manage internally or through the 2PL model. When intricate and long-lasting end-to-end logistics solutions are to be offered, this is a typical first step. Order processing and distribution are being combined with all other necessary subprocesses and workflows, ranging from simple transport and warehouse management.


Therefore, 3PL service providers typically rely on technical advancements and digitization to achieve this goal. This may include current warehouse management systems (WMS), integrated transportation management systems (TMS), digital, paperless solutions to direct transport activities, and RFID-based systems for automated procurement in the warehouse.

With the 3PL logistics model, a wide variety of requirements can be met reliably and efficiently in both the B2B and B2C markets. Various service modules are combined according to the needs of the client company. In this way, sector-specific logistics systems can be implemented, for example for chemicals and pharmaceuticals, for temperature-controlled transports (e.g., in the food sector), or for the specific requirements of automotive logistics.

With this flexibility and diversity, 3PL logistics models are the best choice for large companies to meet their logistics needs from a single source.

4PL stands for Fourth Party Logistics.
The fourth-party logistics, or 4PL, market is one that is still seeing rapid expansion. Once again, going well beyond the 3PL logistics paradigm, logistics organizations are able to attain an even deeper integration of all operations for their customers. All of the process’s accountability, from the original planning to the final execution, ultimately rests with the external service provider.
It is evident that close networking between the parties is necessary for this logistics model to succeed. 4PL suppliers create and execute whole logistics models that are tailored to each unique situation, not just process orders. The customer’s business model necessitates in-depth investigation and broad knowledge.

4PL suppliers thus produce enduring advantages and evident added value for their clients. Since every streamlined process invariably results in lower resource and energy consumption and an improvement in ecological efficiency, the focus is mostly on elements like process optimization, cost reduction, transparency, and last but not least, greater sustainability.

5PL stands for fifth-party logistics.
A relatively new and very fast-growing logistics strategy, according to industry analysts, is 5PL (Fifth Party Logistics). In addition to fulfilling all 4PL standards, 5PL suppliers offer their clients strategic help and guidance.
The 5PL logistics model therefore includes additional services including project management, IT consulting, process analysis and optimization, and management consulting.
Five-part logistics (5PL) suppliers must be true integrators who, on behalf of their customers, package extensive knowledge in automation, big data analytics, supply chain, digitization, and technology.
The goal of this logistics model is to create autonomous, self-optimizing supply chains that are highly productive.

As Globeflight Kenya, we offer various logistics models tailored to the needs of our clients. Kindly feel free to contact us and we will find just the right model for your specific requirements.