2PL Explained: Advantages, Services, Carriers, and More

If you're a Canadian online seller, you've likely encountered various "PL" terms when researching logistics solutions. There are 2PL, 3PL, 4PL, and so on. It can feel like a lot to take in, but don't worry, let's start with the basics.

In this blog, we'll break down what 2PL means, the services it covers, and how it compares to 3PL.

Key Takeaways

• 2PL refers to logistics services that directly own and operate transportation assets, such as trucks, ships, planes, or courier fleets. In simple terms, a 2PL company is the actual carrier that physically transports your products.
  
  
• It’s simple and cost-effective but limited compared to third-party logistics providers (3PLs).
  
  
• It works best for sellers who need straightforward shipping rather than full fulfillment.

What is 2PL (Second-Party Logistics)

2PL (second-party logistics) refers to logistics companies that directly own and operate the transportation assets used to move goods. These transportation assets can be trucks, ships, and planes that logistics providers use to deliver your products from one location to another within the supply chain.

In other words, 2PLs focus strictly on transportation. So, if your priority is moving goods and not storing them in a warehouse, or if you choose to outsource fulfillment tasks, a 2PL may be all you need.

Note: Don't confuse this two-phase locking, which is another meaning for 2PL. It has nothing to do with logistics or carriers.

Key Characteristics of 2PL

Now that you know what a 2PL is, let’s look at the traits that make them unique. Here are some characteristics that help explain where a 2PL fits in the logistics chain:

Asset-Based

As mentioned, a 2PL owns and operates the physical assets needed for transportation. This direct control over vehicles and equipment often results in greater reliability because you're working with the service providers that physically move your goods.

For example:

You hired a trucking company to move freight from Toronto to Vancouver. This company provides a fleet of vehicles, drivers, and fuel, everything needed to complete the delivery. Unlike a freight broker or 3PLs, no middleman is coordinating with multiple carriers.

Simple, Transactional Relationship

The relationship with a 2PL is usually straightforward and service-based. You book a shipment, and the shipping companies deliver it. There's minimal involvement beyond pickup and drop-off. Simply put, it's more like a transactional purchase than an ongoing partnership.

For example:

Let's say you booked an Uber ride. You request a ride, they take you where you need to go, and that's the end ot the transaction.

Similarly, when you use 2PL, there's no deep integration with your inventory management, order systems, or customer service. It is just a straightforward transportation.

Limited Scope

Again, a 2PL's core focus is transportation. They typically do not offer warehousing, fulfillment, or reverse logistics (returns).

For example:

You run an online store selling home décor and need a place to store your products until an order comes in. A 2PL can move your products from a supplier to your warehouse, but won't provide the warehouse space itself.

For businesses that require a broader range of services, such as order picking, packing, and distribution to end customers, providers like 3PLs and 4PLs might be a better fit.

Cost-Effective For Transportation

Since 2PL providers specialize in just one area, they can often deliver competitive pricing and efficiency in transportation. It is an attractive choice for businesses that only need point-to-point shipping within their logistics operations.

For example:

You're shipping a bulk clothing order from a Canadian supplier to your warehouse in the US. Since you only need someone to deliver your items, hiring a 2PL trucking company may be the most economical and straightforward option.

You pay only for transportation without additional service layers, which helps keep costs down.

Examples of 2PL Providers

So, what does a 2PL look like in the real world? These companies come in different forms, but they all share the same goal: moving goods from one place to another as part of effective supply chain management. Here are some common examples:

• Trucking Companies. They act as 2PL providers by directly owning fleets that move shipments domestically or internationally, making them a vital part of the logistics process. They are ideal for bulk shipments, palletized goods, or truckloads between suppliers, warehouses, and retailers.
  
  
• Maritime Carriers. As 2PL providers, maritime carriers own and operate ships that transport containerized cargo, offering essential transportation services for international trade. They're cost-effective for heavy or bulk goods in global markets, even if slower than air freight.
  
  
• Courier Services. Couriers fit into 2PL by handling fast, direct deliveries. They're essential for eCommerce, offering reliable local and international parcel shipping. However, unlike 3PL service providers, they focus solely on the delivery part rather than broader logistics solutions.

1PL vs 2PL vs 3PL: Key Differences

It's easy to confuse 1PLs, 2PLs, and 3PLs, but the truth is they serve different needs depending on the level of outsourcing a business requires. Let's break down the key differences factor by factor:

Integration

A 1PL setup means you handle everything yourself, from inventory management to shipping products using your own vehicle or a local post office. There's no external system involved.

With a 2PL, integration is minimal. You book shipments when needed, and that's the extent of the relationship.

In contrast, 3PL companies integrate directly with your eCommerce platform, so orders flow automatically into their system for fulfillment.

Control

Under a 1PL model, you have complete control over every step: storing inventory, packing orders, and delivering them yourself. While that gives you full oversight, it also means more time and effort on logistics instead of growing your business.

Using a 2PL means you keep complete control over your inventory, storage facilities, and order fulfillment. Again, their sole focus is on moving goods from point A to point B.

On the other hand, a 3PL takes that responsibility off your shoulders. Not only do they deliver the products to your customers, but they also handle fulfillment and storage on your behalf. It's less hands-on for you, but it creates a more efficient supply chain as your business grows.

Cost

With a 1PL, your costs mainly come from maintaining vehicles, storage spaces, and staff—expenses that can add up quickly as your order volume increases.

At first glance, 2PL services are often cheaper since you pay per shipment and don't have to commit to larger contracts. But as your sales volume grows, you also need to scale up. Managing everything yourself can eat up time and resources, leading you to lose time in other aspects of your business.

A 3PL provider usually requires a higher investment, but it pays off by saving you time, reducing overhead, and creating smoother logistics overall.

Best For

A 1PL setup works best for small businesses or startups that handle everything on their own—think local sellers who personally deliver orders to nearby customers.

As for 2PLs, they work best for sellers who only require transportation, such as sending bulk orders to Amazon FBA or moving goods between warehouses.

A 3PL, however, is the right choice if you're ready to scale and need a partner for outsourcing logistics. They will manage the entire picture: fulfillment, cross-border shipping, and even reverse logistics.

Here's a table highlighting the key differences, making it easier for you to compare them:

Similar Read: 3PL vs 4PL: Key Differences, Benefits and How to Choose the Right One

Advantages of 2PLs in the Supply Chain

So why would a seller choose a 2PL instead of jumping straight into 3PL? Here are some advantages of selecting one as your external logistics:

• Cost Reduction. Are you just starting your online shop? Do you only have small shipment volumes? These questions can help you decide on your logistics operator. Using a courier might save you money compared to outsourcing full-scale fulfillment.
  
  
• Enhanced Efficiency. When you need a direct shipment, let's say, sending bulk inventory to Amazon FBA. 2PLs can be faster since they specialize in transport only. They don't have to manage the entire supply chain.
  
  
• Access to Expertise & Equipment. Many companies have expertise and equipment to help you resolve specific challenges. For example, a maritime carrier already has ships and crews to handle overseas shipments. This feature saves you from managing complicated logistics yourself and reduces the need for integrated logistics solutions.
  
  
• Increased Focus on Core Business. You don't have to worry about renting a delivery vehicle to send products to retailers. Instead, book a 2PL and spend more time marketing your brand or growing sales rather than managing logistics on your own.
  
  
• Improved Flexibility & Control. Since you can skip full-service agreements, you control when and how often to use their services. For instance, you only ship large orders seasonally (like during the holidays). You can book transport as needed without committing to the entire logistics process.
  
  
• Scalability. As your sales grow, you can add more partners to support your supply chain operations.
  
  
• Better Visibility. Many companies provide real-time tracking, keeping both you and your customer informed about the package's location.

Final Thoughts

By now, you can see that 2PLs are an excellent option for Canadian sellers who need transportation services. However, as your business grows, it is essential to understand that logistics management becomes increasingly complex. You will need someone to handle storage, shipping, and returns separately.

From 2PL to 3PL: Scale Smarter With Stallion’s Logistics Solutions

At Stallion, we're more than just a shipping service. We're a full 3PL partner offering logistics outsourcing for Canadian businesses. Whether you need warehousing, cross-border shipping to the US, or complete eCommerce fulfillment solutions, we've got you covered.

Scale smarter and streamline your growth with Stallion.

Jose Sagun

Jose is Stallion's Senior Business Analyst. He helps improve the company’s shipping processes, works closely with delivery partners, and looks at shipping data to find the best prices for our customers. Outside of work, Jose has a passion for running, regularly completing 5k and 10k runs, with the goal of running a full marathon in the near future.