Optimizers
5PL
Service
Providers
Contract Logistics
4PL
3PL
Transporters
“Consignors”
2PL
Retailers or Manufacturers
“Consignees”
IPL
Figure 1: A Comparison Between the Players in the Logistics Network
First-Party Logistics companies (1PL’s), the “consignees,” are those that manu-
facture or buy goods. Ultimately 1PL’s want to know that those goods and
materials will be in the right place at the right time. Failure to do so can mean
empty shelves or factory lines sitting idle. Examples of 1PL’s include retailers,
such as Wal-Mart and Target, as well as manufacturers, such as Intel.
Second-Party Logistics companies (2PL’s), the “consignors”, are those that own
the means of transportation (ships, trains, planes, trucks, cargo containers).
They are also deeply interested in delivering on-time, but they also have the
added challenge of managing a complex pool of assets that are constantly in
motion where resource utilization has a direct correlation to the bottom line. In
the case of the top ten global shipping lines, the assets (ships, containers) are in
the millions. Examples of 2PL’s include FedEx, UPS, Maersk, and Union Pacific.
Third-Party Logistics companies (3PL’s), are companies that contract or out-
source logistics services. They may own and operate truck fleets, warehouses,
and distribution centers. Examples of 3PL’s include DHL, Kuene + Nagel, and
C.H. Robinson.
Fourth-Party Logistics (4PL’s) and Fifth-Party Logistics (5PL’s) are relatively
new entrants into the space, and they include all of the service providers that
provide general industry (technology, research, etc.) support as well as those
that seek to build two-sided markets for Logistics. In many ways, they are the
evangelists pushing the dream of automated freight forwarding and
“Logistics-as-a-Service.”
In many ways, the 3PL’s and freight forwarders are stuck in the middle and
often at the mercy of the 2PL’s while trying to schedule and coordinate the
handoffs from factory to port to distribution center and ultimately to the cus-
62 | THE DOPPLER | SUMMER 2017