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Fourth Party Logistics providers act as the head administrator for all aspects in the supply chain of a company. They manage any other contracted 3PLs and provide neutral management, feedback to the company about the state of their supply chain, recommendations and solutions to increase efficiency. In saying this, a larger 3PL can also become a company’s overarching 4PL or display the same characteristics as a 4PL player.
A 5PL will plan, organise and implement logistics solutions on behalf of the contracting company with a focus on utilising the most appropriate technologies. Essentially, a 5PL manages networks of supply chains with an extensive e-business focus across all logistic operations, other than 3PLs and the parent company.
A third-party logistics provider (abbreviated 3PL) is a firm that provides outsourced or 'third party' logistics services to companies for part or sometimes all of their supply chain management function. Fourth party logistics is an integrator that assembles the resources, capabilities, and technology of its own organisation and other organisations to design, build and run comprehensive supply chain solutions. Since the advent of the 4PL service, the international logistics industry has been researching on the development of the fifth-party logistics service i.e. the realisation of full-scale operation of e-procurement. A key function of the 5PL is to aggregate the demands of the 3PL into a bulky volume for negotiating more favourable rates with airlines and shipping companies regardless of which generation of logistics solution belongs to all.
Could it be DHL, Aramex, Agility, Gulf Agency Company (GAC), Swift Freight or Al-Futtaim Logistics? How about Danzas, BALtrans, Al Majdouie, Liberty Logistics or Momentum Logistics
A 5PL will plan, organise and implement logistics solutions on behalf of the contracting company with a focus on utilising the most appropriate technologies.
5PL manages networks of supply chains with an extensive e-business focus across all logistic operations, other than 3PLs and the parent company.
Logistics outsourcing involves a relationship between a company and an LSP (logistic service provider), which, compared with basic logistics services, has more customized offerings, encompasses a broad number of service activities, is characterized by a long-term orientation, and thus has a strategic nature.
1PL – Shipper
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.
2PL
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 their trucks.
3PL
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.
4PL
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 organizations, including 3PLs, to design, build and run comprehensive supply chain solutions for clients.
5PL
A fifth party logistics provider (5PL) will aggregate the demands of the 3PL and others into bulk volume for negotiating more favorable 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 utilization in order to achieve savings and open up opportunities to secure the best possible solution at minimum cost/carbon etc.
6PL – Artificial Intelligence Driven Supply Chain Management
For example, if a dispatch order includes both a motherboard and a processor, an alert is raised to take another look at that order because including both items should really not be necessary.
7PL
A Fourth-party logistics provider (abbreviated 4PL) PLUS a Third-party logistics provider (3PL) might be regarded as a Seventh-Party logistics provider.One service provider can now provide a client with both 3PL and 4PL services with a complete 7PL solution to clients and can undertake turnkey projects for its clients where all services and activities are provided for under one roof.
8PL Super Committee Created to Analyze Competitor’s Results
9PL – Crowd Sourced Managed Logistics Strategy Strategic alliance in Transportation.
Dell Computers have also built powerful alliances with their suppliers for cost saving just-in-time inventory.
Product On transit.
One of the best examples would be the transportation of mushrooms in the vehicle and by the time it reaches the store the product is ready to be harvested at the destination and can be delivered fresh.
Not only in perishable goods but this can be seen in case of truck with concrete mixer is another example. Similarly the partial production process for many products can be done in transit thereby saving time and cost
Take for example a company manufacturing moulded water tanks are transporting in a truck ten numbers. Assuming it cost Rs.20,000/- per load from point A to Z. If the company enters into a strategic alliance with another firm which also transports goods to the same point say washing powder the empty space inside the tank can be used to store washing powder and the cost can be exactly reduced by half.
Similarly this can be applied in transportation of cars where the storage space in the car can be used to transport FMCG products.
Strategic alliance in Warehousing.
In Michigan, USA the cost to construct a warehouse could $40 per Square Foot of building. Now if two different firms come together and decide to have a strategic alliance to share the cost of construction and operation of the warehouse by sharing the resources like forklift which costs around Rs.12 lakhs and the cost of personnel’s in the warehouse. Well again it will lead to 50% of what it is costing the company at present. Better training for employees is an important benefit in entering a strategic alliance in warehouse.
Strategic alliance in Procurement.
The computer and electronics industries have profited greatly from alliance relationships. Innovation has become commonplace for firms that have chosen to work together. Just-in-time inventory can be practically done as we can see in the case of Wal-Mart and Procter & Gamble. Home 10PL – Supply Chain Becomes Self Aware and Runs Itself
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4PL - Logistics, servicing through technology based term.
5PL - Logistics, servicing through collection of resource and networking.
The 4th party and 5th party plays almost similiar services. And The Major difference between these is the Cost reduction & Utilization of resources.
4PL
A fourth-party logistics provider is an independent, singularly accountable, non-asset based integrator who will assemble the resources, capabilities and technology of its own organization and other organizations, including3PLs, to design, build and run comprehensivesupply chain solutions for clients.
5PL
A fifth party logistics provider will aggregate the demands of the3PL and others into bulk volume for negotiating more favorable rates with airlines and shipping companies. Non asset based, it will work seamlessly across all disciplines.
5 Pl is more of process of aggregate all its demands for cost efficiency , the differnce between 4 PL and 5 PL is range of services and integration with clients
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
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 comprehensivesupply chain solutions for clients.
4PL integrator who will assemble the resources, capabilities and technology of its own organisation and other organisations, including 3PLs, to design, build and run comprehensive supply chain solutions for clients.
5PL aggregate the demands of the 3PL and others into bulk volume for negotiating more favourable rates with airlines and shipping companies.
