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A 4PL is a fourth-party logistics provider and it essentially takes third-party logistics a step
further by managing resources, technology, infrastructure, and even manage external 3PLs to
design, build and provide supply chain solutions for businesses.
Logistics strategy
Analytics including transportation spend, analysis, capacity utilization, and carrier
performance
Freight sourcing strategies
Network analysis and design
Consultancy
Business planning
Change management
Project management
Control tower and network management services, coordinating a wide supplier base
across many modes and geographies
Inventory planning and management
Inbound, outbound and reverse logistics management
4PL examples
Deloitte provides 4PL services that go above and beyond traditional 3PL by offering strategic
business insights and consultative services in addition to logistics execution.
Pros of 4PL
UPS are a well-known example of a third-party logistics provider. They offer all the
services listed above and more, and operate on a global scale.
Fulfillment by Amazon is also a type of third-party logistics provider. However, it comes
with restrictions in terms of allowable products and packaging requirements, and
services are more limited than some other 3PLs.
Pros of 3PL
Finding the right 3PL can save you time and money, through economies of scale (eg.
Shipping Rates)
It works well with both local and international distribution, and you can get speedier
delivery by benefiting from their multiple storage locations
It works well for a fast growing business with large order volumes
You can still opt to control customer service and returns
Cons of 3PL
You have less control over your inventory and the customer experience
Finding the right provider who you can trust and rely on can be time consuming
3PL can be an expensive cost, especially when you only have small quantities of orders
Generally, 3PL providers won’t handle perishable, hazardous, or flammable goods