4PL companies are all about supply chain management, planning, analysis, design and optimization. 4PL is outsourced service which can consist of tracking, customer support, supply chain planning, designing and optimization, analytic, reporting. It’s generally corporate job with less field work.
In addition 4PL Companies manage 3PL companies on behalf of their clients. For example, if you are a multinational distributor of products where you have multiple 3PL providers that you work with, you most probably need a 4PL company to coordinate and stream line the process.
Functions provided by 4PL companies
An experienced and reliable 4PL provider will bring value and a new approach to your organization as it will manage the logistics process, regardless of what carriers, forwarders or warehouses are used. As the main contact with the client, 4PL cmpanies have an overall responsibility for logistics performance and the ability to impact the entire supply chain and not just single elements.
A 4PL solution aims to manage people, process and technology. Adopting a 4PL approach brings a different perspective, knowledge, experience and technology to the existing in-house function. Successful 4PL partnerships will see both parties work side by side motivated by mutual success and reward.
Some of the 4PL benefits include: access to a broader base of potential suppliers; back-end system integration; increased market transparency for goods and services; standardization and automation of order placement; reduced procurement costs and order cycle times. If your business and people are sufficiently mature you might also integrate the 4PL into the SOP.
A 4PL company takes over the logistics section of a business. This could be the entire process, or a side business that’s imperative to have as part of the main business.
A 4PL is the highest level of 3PL. This is when the 3PL integrates itself with the company, and ends up taking over the entire logistics operation.
Shippers and consignees often have questions and shared challenges trying to uncover answers deep within complex global networks. It’s why some seek total visibility by partnering with fourth-party logistics providers (4PLs) and lead logistics providers. There are many 3PL Companies in the US but only a few proven 4PL Companies.