{"id":8545,"date":"2019-05-16T16:42:28","date_gmt":"2019-05-16T23:42:28","guid":{"rendered":"https:\/\/www.hollingsworthllc.com\/?p=8545"},"modified":"2019-11-26T14:47:05","modified_gmt":"2019-11-26T22:47:05","slug":"what-are-the-different-types-of-pls","status":"publish","type":"post","link":"https:\/\/www.hollingsworthllc.com\/what-are-the-different-types-of-pls\/","title":{"rendered":"What Are the Different Types of PLs?"},"content":{"rendered":"

[vc_row type=”container”][vc_column][vc_single_image image=”8695″ img_size=”full” alignment=”center”][vc_column_text]From supplying goods to a local store to shipping products across the globe, businesses need to determine the best way to distribute their products. Thanks to innovations of <\/span>complex supply chains<\/span><\/a> around the world, the process of shipping and distributing items has never been easier.<\/span><\/p>\n

However, because of the growth of different party logistics (PLs), choosing the best distribution method for your business may seem more difficult than ever. PLs are represented using numbers, and each level of PL becomes more complex. <\/span><\/p>\n

From 1PLs to 5PLs, businesses have a lot to think about before they finalize their supply chain. Here’s a breakdown of each level of PL and why businesses can benefit from them.<\/span><\/p>\n

\n

First-Party Logistics<\/h2>\n

\"\"<\/p>\n<\/div>\n

First-party logistics (1PL) are the simplest of all shipping methods. 1PL means that the producer supplies their product themselves, essentially becoming the producer, supplier, shipper, and receiver of a good.<\/span><\/p>\n

Many retailers fall under this category. For example, a business that produces t-shirts, ships them to their stores, then sells the shirts at their store is a 1PL. <\/span><\/p>\n

For some businesses, this model isn’t practical. A B2B company may not be shipping products to themselves, but to another business instead. Also, whenever you order something online from a business, the transaction is already beyond 1PL. This is why most 1PL businesses are small and only ship and distribute locally.<\/span><\/p>\n

\n

Second-Party Logistics<\/h2>\n

\"\"<\/p>\n<\/div>\n

One shortcoming of 1PL logistics is that the supplier must use their own transportation. For larger businesses, this could mean owning and managing an entire fleet of trucks, planes, and ships. <\/span><\/p>\n

To avoid the cost of having to run their own fleet, businesses often bring in a second party to ship for them. For a fee, businesses can avoid the huge cost of keeping every step of the shipping process in-house. This is an example of second-party logistics (2PL).<\/span><\/p>\n

A 2PL is any business that focuses on transportation. Some great examples of 2PLs are UPS and FedEx, two shipping businesses. A business could produce a good, sell the product online, and ship it to the customer via UPS.<\/span><\/p>\n

\n

Third-Party Logistics<\/h2>\n

\"\"<\/p>\n<\/div>\n

Businesses may bring in a second party to take over their shipping, but the more complex the shipping and delivery are, the less cost-efficient a 2PL becomes. <\/span><\/p>\n

In order to avoid 2PL inefficiencies, businesses often choose to bring in a <\/span>third-party logistics (3PL)<\/span><\/a> partner. 3PLs provide complex logistics services to keep supply chains running smoothly. In a 3PL partnership, the business maintains control and management over the supply chain while the 3PL finds ways to improve the supply chain. Think of this as outsourcing logistics.<\/span><\/p>\n

Amazon is a prime example of a 3PL. Merchants can create their goods and sell them online. After that, Amazon takes care of the rest, including shipping, warehousing, and reverse logistics.<\/span><\/p>\n

Different 3PLs offer different services, too. While most 3PLs handle logistics optimization, <\/span>warehousing<\/span><\/a>, and distribution, others offer additional services, such as: <\/span><\/p>\n