Life has its fair share of levels that provide organization to industries and this proves incredibly true in logistics. Logistics play a huge role in how we get goods, merchandise etc. from one place to another. Consumers especially experience satisfaction due to this amazing industry. And its hardworking agents such as freight forwarders who put together these shipments so that they may arrive to their final destination on time and in one piece. Understanding the four levels of logistics (The PLs) will help simplify your shipping needs and the processes.
Massive action occurs at the bottom of the supply chain pyramid with the 4PL or fourth party logistics. It generally originates as a long-term partnership bound by a contract between one primary client and at least one other party. People have attributed terms such as, “Lead Logistics Providers” and non-asset-owning service provider to 4PLs. They serve as the overseers and managers of the whole supply chain.
People recognize 3PLs as having a close connection to 4PLs, often mixing up their duties. These providers package together services which include the likes of receiving shipments from shippers and transporting them to the carriers. The legal definition by way of 2008 legislation reads, “A person who solely receives, holds, or otherwise transports a consumer product in the ordinary course of business but who does not take title to the product.”
Second Party Logistics deal with how the carriers will transport the agreed upon items. This day and age presents many different ways to transport goods from point A to point B. These carriers may turn to trucking companies, rail systems, over the water shipping companies and more to get the job done. They may own, lease or charter these means of transportation. Freight forwarders do much of their work in this level. They arrange for the cargo transportation to different cities.
The First Party Logistic level refers to cargo owners. This represents a provider or firm that needs the merchandise, produce, goods or freight transported from one place to another. They rely on freight forwarders. Originally this whole logistics process just included shippers and carriers. Firms and companies started to outsource work to others who specialized in a specific job and the creation of the other PLs came to pass.
Logistics exists solely because of the need to transport freight. The supply chain has come together in beautiful form to make this process easier on all parties. The emergence of the internet has sparked the creation of new parts and factors to this equation. Freight forwarders remain one of the constants that connect the various links in the supply chain. Manufacturing and retailing has grown to new heights because of the great advancements in logistics. People from around the world are connected due to the 4PLs.
The responsibilities regarding these four PLs cover logistics consulting, providing services, transportation and more. They mark essential places in supply chain integration. They cause freight to travel hundreds of thousands of miles every day. The field of logistics continues to evolve and it benefits from the rapid advancement of technology, making processes more simple.
Justin Bright – CEO Brighter Logistics