SHANGHAHI REALHONG INTERNATIONAL LOGISTICS CO., LTD.

1. 1pl (1st party logistics)


The First Party Logistics (1PL) refers to the process in which the material provider itself undertakes the delivery to the material demander in order to realize the spatial displacement of the material. The following problems have become more prominent with the rise of 3rd party logistics:


(1) Since the market demand for products is unbalanced in time, the enterprises configure logistics facilities according to different demands for peak season or off-season, which often becomes a headache for enterprises; no matter how it is configured, it may cause waste or tension in logistics capabilities.


(2) The core competitiveness of a manufacturing enterprise lies in the products it manufactures, and the logistics industry is not the related to its core competitiveness. Therefore, the cost of engaging in logistics business is generally higher than that of professional logistics enterprises.


(3) It is difficult for an enterprise to construct an effective logistics network in its own logistics, so it is almost difficult to meet the requirements of JIT, especially when the supply and demand sides are far apart in geographic location, the enterprise cannot provide effective logistics.


(4) With the rise of 3rd party logistics and the ability to provide increasingly complete logistics services, some of the original advantages of 1st party logistics have disappeared.


2. 2pl (2nd party logistics)


The Second Party Logistics (2PL) means that the material demanders themselves solve the logistics problems of the materials needed to realize the spatial displacement of materials. The traditional logistics undertaken by the second party also has the following problems:


(1) Self-provided transportation tools and warehouses have already made the operating costs of material demanders (mainly the commercial sector) too high. In the era of low-profit business, such expenditures are unbearable for commercial enterprises.


(2) Due to the imbalance in the time of the market demand for commodities, it is difficult for commercial enterprises to reasonably configure the logistics facilities. No matter how they are configured, it may cause waste or tension in logistics capacity.


(3) The core competitiveness of commercial enterprises lies in the sales ability of commodities, and the logistics industry is not related to the core competitiveness. Therefore, the cost of engaging in logistics business is generally higher than that of professional logistics enterprises.


4) It is difficult for commercial enterprises to construct an effective logistics network in their own logistics, so it is almost difficult to meet the requirements of timely delivery.


5) With the rise of 3rd party logistics and the ability to provide increasingly complete logistics services, some of the original advantages of 2nd party logistics are gradually lost.


3. 3pl (3rd party logistics)


3rd party logistics refers to the operation mode of logistics services performed by a third party other than the provider and the demander of material flow. A third party refers to an external service provider that provides both parties with part or all of the logistics functions. In a sense, it can be said that it is a form of logistics specialization. 3rd party logistics has emerged with the development of the logistics industry and is a product of logistics specialization. When the logistics industry develops to a certain stage, 3rd party logistics will inevitably appear, and there is a very close correlation between the 3rd party logistics's share of the logistics market and the level of the logistics industry. There is an international view that the logistics industry can only be formed when independent third-party logistics accounts for at least 50% of society. Therefore, the level of development of third-party logistics reflects and embodies the overall level of the development of a country's logistics industry.