What are 4PL Companies
4PL Companies can be defined as the integrators that utilize their own human resources, technical capabilities, expertise, and technology solutions, and leverage those of other organizations, like third party logistics providers, to design and manage supply chains on behalf of clients.
4PL Companies can provide all the functions of a 3PL (procurement, storage and distribution and processes for each) as well as the ability to provide a customer with the outsourced financial, customer services and computer systems to support commerce.
Logistics outsourcing can enable workforce reduction, freedom from restrictive labor environments, logistics management and technology issues, expanded geographic coverage, operational flexibility, reduced cycle times, improved responsiveness and cost reduction.
The percentage of logistics and manufacturing activity provided through Contract Manufacturers (CMs) and Logistics Service Providers (LSPs) is on the rise.
With many more companies evaluating the viability and the benefits of outsourcing relationships, it is increasingly important to know just what you’re getting into with an outsourcing relationship.
During its life cycle, the outsourcing relationships will form, adjust and reform. All parties involved must plan for this evolution and the changes it will bring.
These days many International freight forwarders are evolving and adopting new technology and strategies to become logistics service providers.
We have been witnessing this evolution over the past 20 years with so many large freight forwarding companies that have started offering 3PL and 4PL Services.
The term 4PL Companies itself is still unclear. Most people still confuse the terms with 3Pl Companies, freight forwarders and even shipping companies. Just think of 4pl Companies as your logistics consultants helping you manage all your 3pl providers.
3Pl Companies offer services such as ocean freight shipping, warehousing and Distribution, Pick and Pack Services, Import freight Services. 4PL Companies work with their clients to coordinate all of these services.