What are fifth-party logistics (5PL)?

Fifth-party logistics (5PL) Fulfillment Services

While many organizations may ask what are fifth-party logistics (5PL), only larger companies may find their cost justified. A 5PL, fifth-party logistics, firm is a resource for companies to outsource all supply chain and fulfillment services. In fact, a 5PL company looks to solve their client’s logistics needs through large networks and technology innovations. Fifth-party logistics¬†solutions are the newest logistics providers and are set to grow exponentially as industries continue to automate.

Fourth-party logistics (4PL) Review

Perhaps the simplest way to compare logistics and fulfillment companies is to compare them to the industry giants. When you think of the biggest e-commerce companies, like FedEx and Amazon, that’s the bar of excellence to consider. Both Amazon and FedEx function as in-house 4PLs by managing their own supply chain. Most companies do not have the resources to match that level of infrastructure. Fourth-party logistics organizations purpose are strategic management.

Logistics, Supply Chain Management and Fulfillment Services

With the emergence of Fifth-party logistics providers, organizations have options that include both logistics coordination, supply chain management and fulfillment services. Companies must decide what resources to dedicate to in-house management or contract to outside firms. In some cases, like those giant 4PLs, mentioned earlier, it’s really a matter of marginalized efficiencies. Profit margins and elasticity of demand economics become of greater importance when dealing with higher volume.

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By | 2021-09-22T05:38:16-04:00 September 22nd, 2021|Categories: ecommerce, Fulfillment|Tags: , , , , , , |0 Comments

About the Author:

Eric Holder is a Marketing Communications Expert with 20 + years experience, in both agency & in-house settings. Holder is astute at identifying Market Differentiators & utilizing teams to leverage Content, SEO / SEM, Social Media, PR, CX, Influencers & Analytics that produce MQLs.

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