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Fifth Party Logistics (5PL) Definition

Posted in Logistics Parties - 1 Apr 2019, 8:44 AM

Fifth party logistics operator has specified jobs using recent technologies from implementing logistics solutions to negotiating rates.  Like 4PL, the company that known as 5PL belongs to the current model. It takes full control of the supply chain operations. When it comes to providing a set of services, this entity gets the most out of recent information technology.  To see how it differs from other types of party logistics, never hesitate to learn more about the clarification below.

What is the Key Role of Fifth Party Logistics Company

The fifth party logistics service provider plays a major role in planning, organizing, and carrying out the solutions concerning logistics. How the entity implements the means of problem-solving refers to behalf of numerous parties – especially the business people. Another role that 5PL has to offer is to accommodate the demand of both 3PL and 4PL.

Unlike the second party logistics operator that has no dealings with price fixing, the 5PL even acts more. Don’t you know that 5PL has a professional job in negotiating the rates that have been decided together with other service providers? The 5PL work with airlines, transporters, and carriers as well. That’s how this sort of company is different from the rests.

Get to Know the Basic Difference between 4PL and 5PL

At a glance, according to common people, fourth- and fifth-party logistics entities appear as something alike. Apart from that reasoning, those two are slightly different regarding the focus about the solutions of e-business. The focus of fifth party logistics company tends to be more extensive compared to the 4PL.

Interestingly, the 5PL has a great commitment when it comes to achieving the cost at the bottom level. Therefore, this brand-new service provider is elated in aggregating the demands of the third-party logistics operator into the bulk volumes. With this, the rates agreed to become more lucrative.

How the Model of 5PL is Made

In comparison to the previous models that appear due to the fundamental need, the presence of 5PL is on account of the popularization of e-commerce. To the point, the appearance of fifth party logistics company has a strong influence from today’s development of IT. The internet is the reason this sophistication keeps going on.

Furthermore, this operator goes with online payment, easing the consignees in the transaction. It doesn’t stop there; it also offers convenience named call center. This facility allows people to give some suggestion and critic regarding service. In sum, the concept of 5PL is by the progress of the times. The supply chain operations and logistics-related implementation are more effective with it.

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