What Is A 4PL?

A 4PL is no more than a supply chain buzz-word used for marketing. A fourth party logistics company is a broker of 3PLs into one network. For most sellers, this does not add alot of value. And the sooner you find folks who tell you the truth, like Momentum Warehousing, the sooner you can start building a trusted relationship with a new logistics partner.

4PL Definition

A Fourth Party Logistics company manages everything a singular 3PL manages, but can include the management of several 3PL partners in it’s network. Therefore, unless you are operating a coast to coast self-fulfillment network on a massive scale you do not need a 4-PL. But, let’s say you were ready to go coast-to-coast. There exist 3PL’s with that nationwide access, who do not need a 4PL to manage them.

4PL Meaning

Again, a 3PL offers end-to-end logistics support for businesses who need help with supply chain management. To illustrate, if you do not want to shop for shippers, complete customs paperwork, search for and coordinate LTL truckers, rent a warehouse, and distribute your own products – then you want a 3PL. A Fourth Party Logistics company technically does all the same, but manages multiple 3PLs. This is redundant for 99% e-commerce sellers. Don’t be fooled or sold on upcharged 4PL services. For example, look at the table below to illustrate how these terms are effectively the same.

How is a 3PL different than a 4PL?

Top 10 Businesses That Use Fourth Party Logistics

How do you know if you need a 4PL? Well lets identify which businesses use a fourth party logistics company – and see if you match with anyone on this list below:

1. Large Enterprises – Large corporations with complex and global supply chains
2. Global Manufacturers – Manufacturers that source raw materials & distribute globally
3. Consumer Goods Companies – Distributors of consumer goods, such as food, beverages, clothing, and household products
4. Retail Chains – Retailers with multiple locations and a diverse range of products
5. High-Tech and Electronics Companies – Industries that deal with sensitive and high-value goods, such as electronics
6. Automotive Industry – Automobile manufacturers and suppliers have intricate supply chains that need 4PL support.
7. Healthcare and Pharmaceuticals – pharmaceutical sectors require strict adherence to regulatory standards and temperature-controlled logistics
8. Energy and Natural Resources – oil and gas, often require specialized logistics solutions for transporting raw materials and finished products across various locations
9. Project-based Industries – Industries involved in large-scale projects, such as construction, infrastructure, and events, might require temporary and customized logistics solutions that a 4PL can provide
10. Companies Expanding Globally – When companies expand their operations to new regions or countries, they might lack the local logistics expertise required