2PL (Second Party Logistics)

2PL, also referred to as Second-Party Logistics, is a business model in which one company contracts the logistics activities of another company. Under this model, the contracted company provides outsourced warehousing, order fulfillment, transportation, inventory management and other services to the principal (first) party. This arrangement allows the first party to focus on its core competencies while taking advantage of the second party’s expertise in logistics. 2PL is often used when a principal party has a lower demand for services than other third-party logistics providers are willing to accommodate.