4PL

Big enterprises often use 4PL solutions. It completely outsources the supply chain and its execution, including packaging and transportation. 

What does that mean? 

Suppose you have a fashion brand. Now you hire a 4PL service. They pick up the inventory from the manufacturer. TRANSPORT it to their warehouses. 

Keep them there and do repackaging. When you get an order from a customer, you pass it to them. They directly fulfill it. They handle all the communication for inventory management & distribution. 

How Does 4PL Work?

4PL is complete supply chain management from supplier to store or direct customer. But what phases are involved in this management? 

First, your 4PL provider picks up your shipment from the supplier or manufacturer. Now their duties involve the following parts. 

• Extra services(Packaging, branding & Inspection) 
• Transportation & Warehousing
• Shipping & Customs management 

They deliver goods directly to your store or customer. Inventory management or updates is the most important point. It gives you better planning to meet customer demand. 

Whenever inventory drops at a certain level, you get a notification. Multi-carrier shipping gets integrated into the system. You choose a shipping plan according to your cost & customers. 

Advantages and Disadvantages of 4PL

Advantages: 

End-to-End solution: 4PL supply chain partners provide end-to-end services and solutions. It handles everything from supplier quality to customer delivery. You won’t have to work much and have to hire multiple agents.

Time-saving: 4PL saves you a good time for expansion. Integrated supply chain services have automation for all operations. Automatic logistics operations mean you have enough time to focus on other chores. 

Better planning: Fourth-party logistics providers give you all tracking of data & inventory. More data points to do the planning. Optimize your operations from these data and save your extra costs. 

Disadvantages:

Less control over inventory: In this logistics model, your provider handles everything. This gives you less control over how you want to handle things personally. Yet you request them any custom request if you have any. Most likely, they entertain your requests. 

Overall operational costs: Whole supply chain outsourcing has huge costs. It mainly includes transportation, shipping, fulfillment & warehouse costs. Only go for a fourth-party logistic service if you have a good sales volume with mature profit. 

4PL vs 3PL

Forth & Third party logistics have different services in their plans. Both are good but which one should you choose? 

Before comparing 3PL vs 4PL, here is the definition of 3PL service. 

3PL is the same as 4PL but does not include complete supply chain management. Most of the time, you ship your inventory to a 3pl company. Then they manage delivery, warehousing & packaging. 

So what are their differences? 

• Level of outsourcing: 4PL is complete outsourcing of the supply chain. Yet there is also a high level of service: fifth-party logistics. 3PL offers a different sort of supply chain function with fewer services. 

• Costs & Pricing:  3PL includes fewer services than 4pl, which results in lower costs. 4PL is more costly due to more supply chain functions. 

• Automation: 4PL handles more logistics tasks, including packing and shipping orders. There is just a single point of contact with tracking and management. It has more automation than 3PL. In 3PL, you must manage several logistics processes that oppose the automation idea. 

• Time-saving: Both offer some sort of automation and save time. But which one is more time-saving? In 4PL, you don’t have to do anything because of all operational management. This makes 4PL more time-saving due to better planning of strategic elements. 

List of 4PL Providers

Company name	Notable services
DHL Supply Chain	3PL and 4PL service provider
UPS Supply Chain Solutions	Customer’s supply chain manager
DB Schenker	Third, Fourth and fifth-party logistics provider
Kuehne + Nagel	Europe’s supply chain industry expert/Service provider
CEVA Logistics	French logistics company
XPO Logistics	Fulfillment and 4PL providers
DSV Panalpina	4PL provider
Geodis	Shipping and fulfillment partner
CH Robinson Worldwide	4PL provider with scalable resources
Accenture	4PL provider with a good network for storing inventory
ARMADA	One of experienced logistics and shipping firms
Ports America	General and Shopify fulfillment network provider
Ryder Supply Chain Solutions	4PL service provider
4flow	Shipping and 4PL service provider
Atria Logistics, Inc	4PL provider
Logistics Plus Inc.	Shipping and Logistics provider
LynnCo Supply Chain Solutions, Inc.	Supply chain management service
Penske Logistics	Logistics service
Transervice Logistics, Inc.	Logistics service provider
XPO Logistics	3PL and 4PL services provider

How to choose the best 4PL companies?

Choosing the right lead logistics providers is difficult, especially for a beginner. You have to go through extensive research hours to choose the right one. This is a three-step guide for you! We have not made it too long to make it concise & Helpful. Here is the step-by-step guide: 

Step 1: Decide what you need. 

Before starting any evaluation process, determine which services you need most. 

Do you have any special requirements regarding services? 

It could be anything like special handling or warehousing in a particular state. Check their website to see if they MENTION their services on it or not. If not. You ask it through the chat box or email. 

Step 2: Check Credibility

Go to their website or Social media accounts to see whether they are updated. See their testimonials & online reviews from past clients. If you are checking service on the B2B platform, it is easier to check past reviews & Feedback. 

Ask for reviews and experiences in social media communities. It is very helpful to ask people about their past experiences. 

Also, here is what I do. I go to the Google search engine and type the company name with the keyword “Scam.” It links to every online material regarding those companies’ suspicious activities. 

Step 3: Negotiation & agreement

You have checked their services and credibility, and it’s negotiation time. Show your long-term collaboration possibility. How would you increase your inventory volumes, and if any extra service you want? 

It shows your interest in their services. 

After finalizing your price, then sign the agreement with proper legal terms. Pay them through only third-party services that have a refund assurance. It’s easier to get a refund in case of issues. Better to have a local representative if you are dealing with Chinese companies. 

FAQs about 4PL

What’s Next

4PL, 3PL, or 5PL all have costs. Also, Shipping companies or freight forwarders are very expensive. Many industry partners have fixed plans without any room for customization. Lower logistics costs by adjusting your plan according to your needs. 

Where to get customized logistics services? 

Leeline offers complete control over making your own choices. Contact us to discuss how you want your logistics service.