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13 Types of Logistics You Should Know About

by Tabassum Nusrat Soti

Logistics can be classified based on many criteria. There are the 5Ps logistics, supply chain direction-based logistics, and then logistics classified based on how and who conducts it. The discussion of the classification of logistics is rather elaborate. According to categories, there are over 13 types of logistics practiced in organizations.

Logistics can be classified based on applications from various dimensions in examining and evaluating alternatives. They are Decision-wise, Actor-wise, and Supply chain direction-wise, as mentioned before. This is what we will walk you through in this article thoroughly.

Decision-Wise- 5 Types

Decision-wise or in the count of the functional departments, logistics is basically of 5 classes. The organization department and the process of workflow through them differentiate these classes. Logistics management the connections effectiveness of every process at every level.

  1. Procurement Logistics
  2. Production Logistics
  3. Sales Logistics
  4. Recovery Logistics
  5. Recycling Logistics

Procurement Logistics

Procurement logistics refers to the movement of commodities when producers purchase the parts and raw materials required for production from suppliers. This field received very little attention in the past. The primary production technique, meanwhile, is the small-lot manufacture of various kinds. Since just-in-time production directly correlates to cutting inventory costs, many organizations aggressively pursue manufacturing by acquiring the required raw and processed materials and supplies in only the necessary amounts at the time.

Production Logistics

Production logistics encompasses all aspects of product management, factory distribution, product management, packing, and warehouse shipment. Logistics managers can use logistics to optimize shipping, delivery management, warehouse dispatch management, and delivery vehicle condition. Sales logistics and procurement logistics, which are covered later, can work together seamlessly.

Sales Logistics

The most typical kind of logistics is sales logistics. In the past, logistics warehouses and delivery hubs supplied most of the deliveries to distribution centers like wholesalers and retailers. However, direct delivery now makes up a sizeable part because of online shopping and e-commerce. To offer the necessary commodities, whether through distribution centers and logistics warehouses or directly from manufacturing sites, it is vital to utilize the critical personnel in the required numbers at the crucial moment, improving customer satisfaction. Inventory levels must drop while delivery and transportation efficiency must rise.

 Recovery Logistics

Recovery logistics is likely if the body’s circulatory system is utilized to illustrate how goods move from manufacturing to consumption by procurement logistics, production logistics, and sales logistics. Contrarily, reverse logistics is the movement that recovers and recycles products, packaging, and containers after they have completed their intended function. Similar to recycling logistics, which they will cover later, this flow is given attention in civilizations prioritizing recycling.

Recycling Logistics

Recycling logistics are frequently seen in recovering and recycling used paper, plastic bottles, and cans. Managers can use the same techniques to retrieve and recycle packaging, outdated PCs, and printer cartridges. The significance of recycling logistics has risen in recent years to protect the environment and efficiently use minerals like minor metals.

Supply Chain Direction-wise: 3 Types

Logistics are of three types in the supply chain direction or location.

  1. Inbound Logistics
  2. Outbound Logistics
  3. Reverse Logistics

Inbound Logistics

Inbound logistics refers to the movement of commodities from suppliers to producers. This entails storing and transferring various products and data from suppliers to manufacturing facilities for processing and production after passing via warehouses. The kind of goods or items that are transported through this logistical route is raw materials.

Take the scenario where you have a factory that makes auto parts. Depending on the nature of your partnership with those companies, you would transmit your car components to various recipients using door-to-door inbound transport. Some examples are providing auto parts to manufacturers, having them incorporate those parts into finished goods, or giving those parts to merchants and distributors. Since auto parts distributors typically use large trucks to transport these goods, picking the correct partner for logistics services is crucial.

Outbound Logistics

Outbound logistics is transporting finished products from manufacturing facilities to the following supply chain link as they move through warehouses and toward the consumption point (in the hands of end-users). The order fulfillment procedure is another name for this.

In the same example as previously, the manufactured auto parts would go through the incoming logistics flow to a store, be sold, and then distributed to the end user, traveling through the outward logistics flow to the desired ultimate location.

Reverse Logistics

Reverse logistics is the collection of steps to move goods or items back to the seller or manufacturer through the supply chain process. This occurs when a product needs to be serviced, repaired, renovated, sold, recycled, recovered, or disposed of properly (in case they are not recyclable or reusable.).

In keeping with our earlier example of automotive components, a particular component can be flawed after being put in a consumer’s car. Customers or intermediaries will return this part to the manufacturer for replacement or repair using the reverse logistics flow.

Actor-Wise: 5 Types

There are five different sorts of actors’ processes in logistics—those that carry out the process or are involved in it. The 5Ps Logistics is known as them. By counting the number of mediums used to transmit items from producers to retail locations in the marketplace, the difference in product transport mediation created this classification.

  1. 1PL – First-Party Logistics
  2. 2PL – Second-Party Logistics
  3. 3PL – Third-Party Logistics
  4. 4PL – Fourth-Party Logistics
  5. 5PL – Fifth-Party Logistics

1PL – First-Party Logistics

The 1st party logistics refers to a firm or individual with its own cargo and freight that can transport goods and merchandise from one point to another. They are consigners of different interests and products and organize the transport of products to their required locations. The primary beneficiaries of the transaction are the two parties involved.

The maker or supplier and the consumer are the only two sides. A First-Party Logistic Model (1PL). Manufacturers and other industrial players do not hire outside organizations to handle their shipping and logistics requirements. The company’s sections are in charge of carrying out these duties.

2PL – Second-Party Logistics

The manufacturer uses a carrier or warehouse manager as a subcontractor in the Model for Second-Party Logistics (2PL) to complete a specific logistical or transport assignment. Planning and carrying out is still in the hands of the manufacturer. The relationship provider is frequently entirely cost-driven and short-term because the logistic actor obeys the client’s orders and is paid as such.

3PL – Third-Party Logistics

According to the 3PL model, a company exerts management control while outsourcing logistics and transportation work to a provider, who may subcontract some or all of the execution. Third-Party Logistics (3PL Service) is a full-service handle that coordinates the business company’s operational logistics outsourcing, from the warehouse to delivery, freeing it up to focus on other business-related activities.

3PL companies provide a wide range of supply chain logistics services. These services include shipping, warehousing, picking, packing, inventory forecasting, order fulfillment, packaging, and freight forwarding. A 3PL (Third-Party Logistics) provider is undoubtedly necessary for a business’s smooth operation, given everything discussed so far.

4PL – Fourth-Party Logistics

A corporation in the 4PL model outsources the management and execution of logistics-related duties across the supply chain. According to the Fourth Party Logistics Model, the manufacturer must hand over control of its planned activities to outside parties and their administration (4PL). Fourth-party logistic suppliers routinely review the entire flexibility chain. Once more, different parties are frequently granted power and responsibility.

No matter which carriers, forwarders, or warehouses are hired, a knowledgeable and dependable 4pl service provider will manage the logistics process and bring value and a re-engineered approach to your organization. The 4PL is responsible for overall logistics performance. It can influence the entire supply chain rather than just specific components because they are the main point of contact with the client.

5PL – Fifth-Party Logistics

The addition of a fifth provider of logistics services might increase demand. It haggles prices with other service providers like airlines, trucks, etc. A company that provides logistics services and creates organizes, and executes logistics strategies for other companies is known as a 5PL operator. The addition of a fifth logistics service provider might increase demand. It haggles prices with other service providers like airlines, trucks, etc.

Businesses that contract with other parties to handle their logistics management duties offer a convincing illustration of this approach. The 5PL idea has recently been oversold due to the rising popularity of e-commerce. Companies specializing in 5PL also provide other valuable services like contact centers and online payments in addition to integrating and managing supply chains.

Bottom Line

From a different point of view of discussion, logistics are various types. And all of them have their other function, necessity, and outcomes. Instead, it is procurement or second-party logistics, and all these classifications help the logistics process be more precise and efficient. The ultimate objective of logistics, which is organizing and carrying out the effective movement and storage of tangible products from the place of origin to the site of consumption, would be to rapidly and affordably satisfy client requirements.

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