The Doppler Quarterly Summer 2017 - Page 64

Optimizers 5PL Service Providers Contract Logistics 4PL 3PL Transporters “Consignors” 2PL Retailers or Manufacturers “Consignees” IPL Figure 1: A Comparison Between the Players in the Logistics Network First-Party Logistics companies (1PL’s), the “consignees,” are those that manu- facture or buy goods. Ultimately 1PL’s want to know that those goods and materials will be in the right place at the right time. Failure to do so can mean empty shelves or factory lines sitting idle. Examples of 1PL’s include retailers, such as Wal-Mart and Target, as well as manufacturers, such as Intel. Second-Party Logistics companies (2PL’s), the “consignors”, are those that own the means of transportation (ships, trains, planes, trucks, cargo containers). They are also deeply interested in delivering on-time, but they also have the added challenge of managing a complex pool of assets that are constantly in motion where resource utilization has a direct correlation to the bottom line. In the case of the top ten global shipping lines, the assets (ships, containers) are in the millions. Examples of 2PL’s include FedEx, UPS, Maersk, and Union Pacific. Third-Party Logistics companies (3PL’s), are companies that contract or out- source logistics services. They may own and operate truck fleets, warehouses, and distribution centers. Examples of 3PL’s include DHL, Kuene + Nagel, and C.H. Robinson. Fourth-Party Logistics (4PL’s) and Fifth-Party Logistics (5PL’s) are relatively new entrants into the space, and they include all of the service providers that provide general industry (technology, research, etc.) support as well as those that seek to build two-sided markets for Logistics. In many ways, they are the evangelists pushing the dream of automated freight forwarding and “Logistics-as-a-Service.” In many ways, the 3PL’s and freight forwarders are stuck in the middle and often at the mercy of the 2PL’s while trying to schedule and coordinate the handoffs from factory to port to distribution center and ultimately to the cus- 62 | THE DOPPLER | SUMMER 2017