It’s easy to get confused between what a third-party logistics provider (3PL) and fourth party logistics provider (4PL) can offer for your company. While there is some crossover into what they can contribute to your warehousing, distribution, and transportation management, there are some critical differences that you need to be aware of before outsourcing your supply chain logistics. In this blog, we’ll outline some of the specific services each unique provider can offer to help your company.
What is a 3PL?
A 3PL is a third-party logistics company that collaborates with companies to efficiently foster shipping and help manage a company’s logistics operations department. The services they provide are scalable and custom-tailored to the customer’s unique needs. Factors like delivery requirements, shipping schedules, and market conditions all play a role in how they go about performing their role. 3PL services include:
- Integrating operations
- Delivery services
- Transportation coordination
- Project management
With so many 3PL options available nationwide, you’ll be able to find a specific service that accommodates exactly what you’re looking for from a leading logistics provider. There are several types of 3PL providers including:
- Standard: Packing, warehousing, distribution services
- Service Developer: Similar to standard, but includes tracking and cross-docking
- Customer Adapter: When a 3PL entirely manages the logistics of a company
- Customer Developer: Complete 3PL integration for comprehensive project management
What is a 4PL?
A fourth-party logistics company offers complete and total control over your company’s entire logistics section. A 4PL integrates into the company’s strategy to categorically manage an entire section of their company. They take great lengths to manage several moving parts, rather than individual tiers of the supply chain process like some 3PL providers. 4PL providers offer services including:
- Optimal transfer organization
- Complete vendor management and supplier coordination
- Synchronized inbound and outbound logistic operations
- Custom-tailored managed distribution networks
- Comprehensively-integrated technology offering
A 4PL company functions as a liaison between their client and all of their unique vendors and suppliers. They manage an entire network due to their lofty position when it comes to a company’s supply chain management. Once a company becomes a trusted advisor and works alongside the customer rather than simply for them, they’re considered a 4PL
How do I know which solution is right for my company?
While both 3PL and 4PL providers collaborate with their companies to optimize their service, there are some different roles they play depending on what you need. What you need from a provider is entirely contingent on what sort of project you’re looking to accomplish and what kind of resources you have at your immediate disposal. If you need a quick-fix and don’t want to hand over total control over your logistics operations, then a 3PL might be a better fit. If you need comprehensive data management and long-term strategizing and consultation, a 4PL might work best. Whatever provider you choose, make sure that you take into account the project you’re working on and what service you want them to perform for you and your company.
Have Questions? Contact FW Logistics today to get started on the right logistics solution for your business.