1PL to 5PL – what are the differences and why are they important? Thumbnail

1PL to 5PL – what are the differences and why are they important?

Cargo Express

If you are a manufacturer or builder and you have customers who order your products for delivery, you need a way to get your material from point A to point B.

The logistic transport services you choose to employ could depend on the size of your business and area of operation. Depending on your chosen transportation method, you will be using one of first- to fifth-party logistics, or 1-5PL.

But what are the differences between each method, and why does it matter? Using our expertise as one of the most efficient logistics companies in Birmingham, our experts explain exactly that!

First-party logistics

As the name would suggest, 1PL is used to describe when the person or company handles all of their logistical needs themselves, transporting their products with their own vehicles directly to the customer.

1PL is often best suited for smaller, local businesses or sole traders looking to distribute within a single community or area who can be completely self-sufficient in their logistical needs.

Second-party logistics

A company that provides 2PL services will handle the transportation and storage of products and materials on behalf of other companies, who will be considered as their clients. The manufacturers or suppliers and the logistics provider will be separate entities.

At Cargo Express, we offer 2PL services to some of our clients, providing our services as purely a transportation solution through the use of our European HGV fleet, warehousing solutions, and international supply chain connections.

Third-party logistics

3PL service providers often take control of a larger part of the logistical process on behalf of their clients, providing more than just carrier services like a 2PL provider.

While a 2PL provider hands exclusively the transport and storage of goods, a 3PL provider may do that alongside handling the relevant customs procedures, inventory administration, management of returns, and more.

The range of services a 3PL company can provide far surpass that of 2PL companies, and the manufacturers or suppliers looking to use them can pick and choose any number of them.

We provide a comprehensive 3PL service with the ability of full fleet tracking, transport planning, and more.

Fourth-party logistics

4PL service providers will handle all aspects of the supply chain on behalf of their clients, beyond the physical transport and delivery of various materials. A company offering 4PL services will focus on the optimisation of the entire logistical process, including communicating with the manufacturers, drivers, and even the customers themselves.

4PL services are often best for larger companies with complex supply chain needs, with operational areas spanning large areas or across the whole world. The logistics company in charge will often take an analytical and adaptive approach to help deliver better results and evolve their operations over time.

At Cargo Express, we offer a full team of logistics experts, ready to work alongside existing or provided transport teams, with your best interests at heart to provide the best possible 4PL service on the market.

Our logistics team work to provide a bespoke service to every client, tailored to their specific needs that is ready to grow and change according to your company’s growth and development.

For example, we have worked closely with several manufacturers by telling them the best time to produce goods within their required time-frame for a smarter and more efficiently driven delivery schedule.

This allows us to utilise the most efficient vehicles and create the most cost-effective routes for our customers in their logistics operations. We even work with the customers of our clients by pre-calling and emailing them to advise on updated delivery windows and changing plans based on customer requirements.

Fifth-party logistics

The most recent development in the logistics industry, 5PL, reflects the management and development of a new supply chain, though the exact definition of 5PL services is debated.

A 5PL provider will be responsible for organising, implementing, and managing a new supply chain or network that is fully integrated to encompass the entire journey and, most likely, going through multiple outsourced providers.

An effective 5PL strategy requires the use of complex computer systems which can utilise data and breakthrough technologies to effectively co-ordinate large scale operations. Through the use of our logistics teams and effective company software, Cargo Express are able to provide our clients with operations of this scale if they are needed.

Contact Cargo Express to find out more

If you’re in need of a unique supply chain solution, including anything from warehousing solutions to heavy goods transport and international freight, Cargo Express can help.

We are among the best logistic companies in Birmingham, perfectly and strategically placed to efficiently direct our efforts both nationally and across Europe.

Call us on 0121 384 1323 at any time of day to find out exactly how we can help you!