The most prominent benefit for first-party logistics providers is that they can control logistics and distribution factors like quality, speed, efficiency, packaging styles, branding, and modes of transport. This gives businesses more room to make changes, improvements, and customizations. All of this can also help create a stronger bond between the business and their customers, since they now have the freedom to adjust their operations according to their customers’ requirements.

As advantageous as it is to be a first-party logistics provider, it comes at a price, literally. High-quality, efficient, streamlined logistics and distribution can be costly, since being a 1PL means that you’ll have to purchase and own the necessary space, equipment, and transportation mediums needed to facilitate these processes. You may also need to hire more staff, which is an extra cost. For this reason, first-party logistics is typically taken up by bigger companies that can afford it, and even save money by operating at scale.

Since 2PL companies are only in charge of the transportation portion of a supply chain, they only need to own the equipment and vehicles they use, and don’t need to own any inventory or storage spaces. This significantly reduces their expenses.

The main drawback of 2PL is the fact that it doesn’t provide complete logistics and distribution support. 2PL companies primarily focus on transportation and movement of goods from one location to another, but typically don’t offer other logistics services.

In addition to completing 3PL services, 4PL providers can also manage, plan, and strategize your logistics, business/supply chain, projects, and supplier and buyer networks. Some 4PL providers even offer consulting services.

4PL providers can save you even more time than 3PL providers can, since they take care of your end-to-end logistics services. You may also be able to make better business decisions with the additional business operations insights they offer .

Using a 4PL provider may mean that you will have even less control over your logistics operations than you would with a 3PL provider. They are also usually very expensive.