4PL

What is a 4PL?

A 4PL (Fourth Party Logistics Provider) is a service provider that manages and optimizes an entire supply chain for a company. 

A 4PL offers clients the following advantages:

• Holistic supply chain optimization 
• Cost reduction 
• Less monitoring effort and complexity 
• Neutral selection of actually required services 
• Flexible response to market fluctuations 

The term 4PL should be distinguished from 3PL (Third Party Logistics Provider). While a 3PL primarily provides physical logistics services such as transportation, warehousing, and distribution, a 4PL acts as a strategic partner and central coordinator of the entire supply chain from procurement to shipping. Unlike a 3PL, which often owns warehouses and vehicles, a 4PL focuses on coordinating these and other assets. 

To fulfill its role, a 4PL requires a high level of IT expertise to consolidate and analyze data from various systems of the companies involved in the supply chain. 

Key characteristics of a 4PL:

• End-to-end management – The 4PL takes full control of the supply chain, including planning, IT integration, optimization, and monitoring. 

• Cost and efficiency optimization – Centralized management and bundling of logistics services lead to economies of scale and increased efficiency. 

• Independence – A 4PL does not own its own transport or storage capacities but procures them on a project basis from external partners. 

• Technology-driven approach – 4PLs use advanced IT solutions for data analytics, process automation, and track & trace. 

Well-known 4PL providers include 4flow and Accenture Supply Chain & Operations.