What exactly is 3PL, 4PL and 5PL and what is the best option for your business? 

The variety of options can be overwhelming if you’re looking for a transport logistics partner. Logistics sites are often packed full of jargon, and it can be difficult to know what to look for, especially if you are scaling up your business or you’re new to European or Worldwide freight.  

Luckily, that’s where our team can help.  

At Waller, we work closely with businesses across the UK and Europe, helping companies like yours to maximise their logistics efficiencies.  

We know you want to get your shipments from A to B as quickly and cheaply as possible.  

You want to have complete tracking and exceptional communication so you know where your items are at any stage of your shipment.  

That’s where we excel.  

But beyond that, we always make sure you know you’re choosing the right logistics service for your needs.  

With that in mind, we want to turn your attention to the different types of services offered by external logistics providers like us. Even if you’ve used the same services for years, you may be surprised how many other options could provide better efficiencies.  

So, let’s find out more about the differences between 3PL, 4PL and 5PL.  

It all starts with 1PL and 2PL 

Before we move into the reams of “third-party logistics” and beyond, it’s essential we start at the beginning. Without understanding how these shipping logistics begin, it’s impossible to understand the value and efficiencies that 3PL, 4PL and 5PL can bring.  

1PL, also called “first-party logistics,” is when a company moves its own goods from one place to another. For example, first-party logistics is when you use your own vehicles to deliver something straight to your customer. 

2PL, which stands for “second-party logistics,” is when a company from the outside helps with the shipping process. The second-party logistics provider will own their assets, like HGVs, and use them to transport goods for the first business. For example, you might work on a 2PL basis if you need to deliver an item to a customer but don’t have enough vehicles to do it yourself or if you’re expanding into international shipping. 

3PL is where shipping becomes more complex 

If you’re searching for an external logistics partner, you’re probably coming across the term 3PL or third-party logistics. This service is brought in when your shipping needs become more complex and time-consuming to manage in-house.  

3PL services are where you bring in an external third party (like us) to manage your shipping needs on your behalf. 

A 3PL transport partner will typically offer a wide range of services such as freight forwarding, customs management, road haulage, sea freight, air freight, warehousing and returns management.  

The benefits of partnering with a 3PL provider 

Working with a 3PL logistics team can help you save time and money if your business is growing or going international. You won’t have to pay for storage or warehouse space or worry about managing a fleet of vehicles. Instead, you can save time (and money) and grow your business faster by focusing on other parts of business development. 

Moving into 4PL logistics 

Now we’ve explored the concept of 3PL shipping, you may wonder how 4PL (or fourth-party logistics) differs and when to know if it’s right for you.  

4PL is a more advanced way of managing the supply chain. Instead of just focusing on the delivery part of shipping, 4PL is about improving the whole logistics process from beginning to end. Most of the time, a 4PL provider won’t own the assets (such as the trucks or storage facilities). But with a network of contacts, you can get quick shipments that put time and money savings first. 

At Waller, we help businesses in the UK and Europe with their 4PL needs. Our main goal is to ensure we look at your shipping logistics strategically, and find ways to make the whole process more efficient. 

The business advantages of using a 4PL process 

4PL logistics are ideally suited to businesses requiring a complex supply chain, perhaps spanning many countries and multiple partners.  

As a single point of contact, your 4PL provider should be able to liaise with all relevant parties on your behalf and use technology to give accurate updates at each stage of your dispatch and delivery.  

It can often be a more flexible shipping option because 4PL providers don’t own the transport assets (such as trucks or containers). Your choice of 4PL provider won’t be tied to using specific transportation; instead, they can use a network of contacts to find the most appropriate shipping solution for your needs. For example, if time is of the essence, they can identify rapid dispatch solutions, or if the budget is more pressing, a 4PL provider can use a different network that prioritises cost efficiencies.  

What about 5PL options? 

Fifth Party Logistics, or 5PL, is the latest addition to supply chain logistics.  

It offers the most advanced form of supply chain management.  

5PL providers coordinate multiple logistics providers and offer complete end-to-end management for businesses. Through the careful integration of complex IT systems, a 5PL provider should be able to provide strategic planning, full coordination and complete optimisation of all logistics on behalf of the business selling the goods.  

5PL is suited to businesses with multiple stakeholders, dispatching goods internationally across a wide range of transportation modes such as sea or air freight as well as road haulage.  

At Waller, we believe the success of fifth-party logistics lies in its flexibility.  

It can be brought in quickly if your business has seasonal fluctuations and can help you to scale up your business. The holistic management of a 5PL provider means you’ll have expert support to help you with international trade regulations and customs clearance processing. You can expect your 5PL provider to help you figure out how to clear customs, get the correct paperwork, and meet the rules of different countries. They’ll also work closely with customs brokers on your behalf to make sure rules are followed, and things move smoothly across borders. 

The advantages of investing in 5PL 

As you can imagine, there are many business benefits of choosing to invest in a 5PL provider.  

For a start, you can improve your efficiencies. With expert support far outweighing what can be managed internally, you can oversee your entire supply chain in one place, optimising individual parts of your supply chain processes. You can use the latest technology to benefit from real-time tracking and increased visibility, providing more precise communication from start to finish. What’s more, you can expect your 5PL provider to leverage their industry expertise to optimise the shipping routes, consolidate shipments and negotiate favourable rates. All of which can provide you with substantial cost savings.  

 

 

 

Waller can help you to decide what is right for your business 

Our clients trust us to provide a practical transport logistics offering that matches their needs and budget.  

We believe logistics should always offer flexibility; after all, not every shipment will have the same time or cost constraints. Therefore, we work with clients to make sure they receive the most appropriate shipping solution every single time. 

We can offer 3PL, 4PL and 5PL services to clients across the UK and Europe, and we have substantial expertise in international shipping using sea freight, air freight, and road and rail haulage. Our services are designed to get your items from A to B as quickly and cheaply as possible, with minimal stress for your internal teams.  

Thanks to our external shipping expertise, you can focus on other areas of your business, knowing that your shipments will arrive at their final destination on time.  

Please get in touch to learn more about how we can help you optimise your logistics efficiencies and your wider supply chain management.  

Back to Info Hub