| Model | Who Handles Logistics | Scope of Services | Best For |
|---|---|---|---|
| 1PL | The company itself | Own transport, warehousing, and staff | Small businesses, local delivery |
| 2PL | Asset-based carriers | Transport only (air, sea, road) | Companies needing shipping capacity |
| 3PL | Outsourced fulfillment providers | Warehousing, picking, packing, shipping | Ecommerce & scaling brands |
| 4PL | Supply chain integrator | Manages multiple 3PLs & carriers | Enterprises needing end-to-end coordination |
| 5PL | Network orchestrator | Strategic management of entire supply chains using tech & big data | Global businesses optimizing cost & efficiency |
At a glance: how 1PL to 5PL models differ in scope and control.
1PL – First-Party Logistics
- A company manages its logistics entirely in-house.
- Owns vehicles, warehouses, and staff.
- Full control but also full cost and responsibility.
Example: A local bakery delivering bread with its own vans.
2PL – Second-Party Logistics
- Outsourcing transport to asset-based carriers (shipping lines, airlines, trucking companies).
- The business still manages warehousing and inventory.
- Focused on moving goods from A to B.
Example: A manufacturer hires FedEx Freight to ship pallets to retailers but stores inventory in its own warehouse.
3PL – Third-Party Logistics
- The most common outsourcing level in ecommerce.
- Handles storage, inventory, picking, packing, and shipping.
- Can integrate with sales channels for seamless order flow.
Example: An ecommerce apparel brand uses Selery Fulfillment to store inventory, ship orders, and process returns across Shopify and Amazon.
4PL – Fourth-Party Logistics
- Acts as a supply chain orchestrator, often managing several 3PLs, freight forwarders, and carriers.
- Focuses on optimization, integration, and strategy.
- The company itself often doesn’t own physical assets—it coordinates others.
Example: A multinational electronics brand hires a 4PL to manage dozens of 3PLs across regions, ensuring consistent performance and cost savings.
5PL – Fifth-Party Logistics
- The newest model, focused on networks and technology.
- Uses big data, AI, and advanced software to optimize supply chains at scale.
- Manages entire ecosystems of logistics providers for efficiency and cost reduction.
Example: A global marketplace partners with a 5PL to optimize shipping routes, negotiate rates with carriers, and balance inventory across continents using predictive analytics.
Which Logistics Model Is Right for You?
- Small local businesses → 1PL or 2PL for control and simplicity.
- Scaling ecommerce brands → 3PL for warehousing + fulfillment expertise.
- Large enterprises → 4PL for global integration.
- Global corporations → 5PL for tech-driven supply chain orchestration.