The Salient Features Of 4pl Over 3pl Logistics

In a day and age where enterprises are outsourcing regular jobs and focusing on more

specialized and strategic business areas, the importance of 3PL logistics saw a rising demand. However, soon, companies realized that they needed to spend a lot of time in coordinating with these firms. Hence many of them hired a specialized firm to oversee and control the operations of these third party logistics firms. These specialists are known as fourth person logistics firms (4PL).

As compared with a 3PL logistics provider, a 4PL provider is to organize the various resources, technologies and capabilities of the third party on behalf of the original firm. It is very important to note then when you are hiring a fourth party to handle your logistics, you should make sure that the firm in question is a non-asset based firm. This helps you ensure that there is no conflict of interest whatsoever.

The entire process of warehousing and distribution doesnt just involve the use of specialized manpower, but also calls for the use of specialized software portals and stock management systems. However, many 4PL firms today offer much more than just that. They also provide the entire gamut of services that you would expect from a 3PL firm. So, they would provide services like transportation, contract warehousing, packaging, dispatch and stock management.

Following are some of the salient features of the 4PL systems:

It aims at unlocking the true value of the various services that are a part of the supply chain process.

Often, these solutions are custom made because each manufacturer has different requirements. The key lies in finding a firm who can completely customize your requirements.

In a new economy where firms are trying to keep their own structures lean by contracting routine matters to another firm, the 4PL system certainly comes in handy.

Another great advantage that has led to a rise in the popularity of fourth party logistics is that it offers better profitability and higher margins for contract warehousing and several other services.

It is always prudent to choose a non-asset based organization for your fourth party logistics because such firms can partner with the best suppliers across the country and take steps that are in the best interest of their customers.

All of these points that we have mentioned above give a company the option to be more flexible and save money in warehousing and distribution. It has become important for firms to take rapid steps in this direction so as to keep pace with fluctuating economic demand and seasonal market changes. This is especially true in the case of firms in rapidly progressing economies such as New Zealand. Such firms will help you combine the best of 3PL logistics and 4PL.

by: Abharim Nel

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