1PL, 2PL, 3PL, 4PL, 5PL ???

There is clearly a lot of confusion in the industry around these acronyms, what they stand for and what they mean in practice.  I was surprised to see the 5PL term used by a WMS vendor I was looking at and as I searched the net to see how many other people had started to use this term I stumbled upon an old Times of India article that illustrates the confusion and even found a transport company branding themselves as a 5PL.

Seriously? This is a case of
people forgetting that an acronym actually stands for something. We all agree that 3PL stands for third party logistics. The first party is the vendor, the second party is the customer and the third party is the logistics service provider. 

Fourth party logistics is a logistics management service that does not touch or run logistics services but only manages multiple 3PLs and freight providers on behalf of the vendor rolling the package up into a single bill, hence they are a fourth party in the transaction. 

A 3PL with value added or extended services such as customer service or debtors management is not a 4PL they are just extending their range of services but they are still a third party.

5PL is just a new made up acronym to make it sound like you are at the cutting edge. True 4PL is rare, 5PL does not exist. If someone can provide an appropriate definition and a live example for 5PL then I will happily be proved incorrect and add it to the glossary of logistics terms on my website (WPI members only).


This has been my most popular blog post to date and I think this illustrates the amount of misinformation and confusion on this topic.  So far no one has come up with a definition or an example of a 5PL.

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