What is 1PL (First Party Logistics): An Introductory Guide

When your business handles every part of its shipping process—from storage to delivery—you're using a 1PL model. But what is 1PL exactly? Let's explore what it means, who uses it, and how it compares with other logistics models.

Key Takeaways

• 1PL (first-party logistics) means the business manages its own shipping, storage, and transportation.
  
  
• This logistics option is ideal for businesses with limited shipping volumes or localized operations.
  
  
• It offers flexibility but limits scalability as business demands grow.

1PL Meaning: What is it

First-party logistics (1PL) is a logistics setup where the business handles every stage of the supply chain internally.

Simply put, you:

• Own the vehicles
• Manage the storage facilities
• Hire your own staff for transportation and delivery

There are no external carriers or third-party providers involved.

For example:

You own an online toy store. However, instead of letting delivery companies send the items on your behalf, you do it personally. You hand in the orders to the customers using your own vehicle. This system is under a 1PL model.

Who Uses 1PL

Here are some of the industries that use the 1PL model:

• Small businesses serving local areas
• Retailers or farms managing direct-to-consumer deliveries
• Companies that require strict control over their logistics process (food suppliers or specialty shops)

This setup works well for companies that ship low volumes or want hands-on oversight of their operations.

What are the Pros and Cons of 1PL

Managing logistics in-house can be empowering, but it also comes with its own challenges. Let's break them down:

Pros of 1PL

• More Flexibility. Businesses can decide how, when, and where to deliver the orders. There's no need to depend on external schedules or policies.
  
  
• Reduced Complexity. With 1PL, you eliminate third-party coordination. You can manage everything, from scheduling to tracking, under one roof.
  
  
• Better Customer Service. Because you control every stage, you can ensure on-time deliveries and maintain consistent communication with your customers.

Cons of 1PL

• Limited Scalability. As order volumes grow, it becomes challenging to manage logistics operations internally. You will need to invest in vehicles, staff, and systems up front.
  
  
• Greater Risk. Note that all logistics responsibilities fall on your business. Therefore, issues like vehicle breakdowns, delays, or compliance errors can directly impact operations.
  
  
• More Backend Management. Running logistics in-house means juggling scheduling, routing, and maintenance. All of these tasks take your time away from core business activities.

How to Streamline 1PL Shipments

Even with its challenges, 1PL can run efficiently with the right strategies. Here's how to optimize your operations:

1. Standardize Processes

Document step-by-step procedures for receiving, storing, packing, and shipping. A clearly defined standard operating procedure (SOP) ensures everyone follows the same process. As a result, it reduces confusion and human error.

Standardization also makes it easier to train new employees and maintain consistent service quality.

2. Optimize Inventory Management

Implement barcode scanning or RFID systems for proper inventory management. It helps you prevent overstocking, reduce stockouts, and improve order accuracy. Additionally, organize warehouse layout strategically.

Place fast-moving items near packaging stations and labelling zones clearly. This makes picking and packing faster and more efficient.

3. Leverage Technology

Use logistics software to automate and streamline daily operations, such as:

• Shipping management tools
• Route optimization systems
• Warehouse management software (WMS)

These platforms can reduce manual errors, lower costs, and shorten delivery times. Incorporating them with your eCommerce or order management system allows seamless order tracking from purchase to delivery.

4. Improve Packaging

Use standardized box sizes and eco-friendly materials to minimize waste and shipping costs. This strategy also helps you align with sustainability goals and appeal to environmentally conscious customers. Proper packaging also minimizes product damage during transit, reducing returns and customer complaints. If you need some recommendations, consider using recyclable boxes and biodegradable fillers as the best options.

5. Train and Cross-Train Staff

Ensure all staff are familiar with multiple logistics tasks, making operations smoother even when some team members are not around. You need to keep everyone updated on logistics best practices, safety protocols, and new technologies.

Yes, it may sound costly at first. However, this flexibility keeps operations running smoothly, especially during peak seasons or unexpected absences.

6. Monitor KPIs

You can start by tracking key performance indicators (KPIs), such as:

• Order accuracy
• Delivery times
• Shipping costs

Customer satisfaction

Regularly reviewing these metrics helps you to identify bottlenecks early. For example, a spike in late deliveries may signal a need to revisit internal workflows.

7. Continuous Improvement

Treat logistics as an evolving process rather than a one-time setup.

• Collect customer feedback
• Review operational data
• Conduct regular audits to uncover improvement

You can also encourage your team to suggest process enhancements and stay open to new tools or technologies that can boost efficiency, accuracy, and customer satisfaction.

What's the Difference Between 1PL, 2PL, 3PL, 4PL, and 5PL

It’s easy to mix up 1PL with other logistics models since they all deal with shipping and fulfillment. To make things clearer, here’s how 1PL compares to 2PL, 3PL, 4PL, and 5PL.

In other words:

• 1PL. You handle everything in-house.
  
  
• 2PL. You hire a 2PL provider for transportation only, but you will manage storage and fulfillment.
  
  
• 3PL. A 3PL provider manages shipping, fulfillment, and sometimes warehousing.
  
  
• 4PL. The 4PL provider manages multiple 3PLs and oversees the entire supply chain strategy.
  
  
• 5PL. The 5PL provider focuses on optimizing logistics networks through advanced technology and automation.

Similar Read: 3PL vs 4PL: How to Choose the Right One

How to Choose the Right Logistics Model

Choosing between 1PL, 2PL, 3PL, and 4PL depends on business size, shipment volume, and available resources. As mentioned above, each model offers a different balance of control, cost, and convenience. So, it's crucial to assess what logistics solutions you truly need.

When deciding whether to shift from 1PL to getting an actual logistics provider, consider the following factors:

• Order Volume. Are your current logistics processes struggling to keep up with rising demand?
  
  
• Storage Capacity. Do you have enough space to store, organize and ship inventory efficiently?
  
  
• Technology and Integration. Can your current logistics systems handle real-time tracking, order syncing, and inventory visibility?
  
  
• Customer Expectations. Are delivery times and accuracy meeting customer standards?
  
  
• Scalability. Will your current logistics model still work as your business grows or expands to new markets?

Your answers to these questions will point you to the most suitable type of logistics service, making it easier for you to decide which one you should get.

Final Thoughts

1PL logistics can be a great starting point for businesses that want complete control over their operations. But as orders grow, handling logistics needs in-house can limit scalability and efficiency. Partnering with a trusted 3PL service can help you meet your logistics requirements.

Upgrade Your 1PL Supply Chain to Smarter 3PL With Stallion

Are you overwhelmed managing the entire logistics process on your own? It might be time to partner with a third-party logistics provider like Stallion.

With Stallion, you can experience faster, more reliable, and cost-efficient shipping, perfect for Canadian businesses.

• Cross-border and domestic shipping between Canada and the US
• Affordable, fast, and reliable delivery options
• Strong carrier partnerships to ensure smooth, on-time transportation
• Secure warehousing and storage across Canada
• Automated order fulfillment and real-time inventory management
• Seamless integration with major eCommerce platforms
• Efficient pick-and-pack returns management solutions

From warehousing to last-mile delivery, Stallion simplifies your entire supply chain so you can focus on what truly matters. Grow your brand and deliver an exceptional customer experience.

Claudine Joy Rada

Candy Rada is a dedicated professional with tons of experience in content writing for the shipping industry. As a literature degree holder, she excels in creating engaging content with strategies that enhance brand visibility. She enjoys playing with her cats, reading dystopian books, and joining trivia games in her free time.