Table of Contents
What are (3PL) third-party logistics services?
Businesses nowadays prefer outsourcing to handle all operations in-house. This decision definitely contributes to enhancing productivity and efficiency. Such growth is possible with the use of 3PL, i.e. third-party logistics services, and you can focus on customer satisfaction as well as marketing more aggressively. The whole purpose of 3PL facilitation is to store your business inventory and be a link between customers and manufacturing units.
3PL service is quite necessary to act as a fulfillment company for your business.
Process of third-party logistics Services
What are the benefits of third-party logistics Services For Your Business?
- Drive Cost Savings - Your company’s supply chain functions will surely be lesser extensive than those of specialized logistics firms. You can save a lot on drive costs as a benefit of their exclusive relationships within the logistics arena.
- Expert Fulfillment - Supply chain logistics is not that simple and can be an overwhelming task without the help of experts. The shipping, warehousing, and fulfillment by experts are something you cannot skimp on. This is what 3PL logistics service provides you while streamlining the whole process.
- Shorter Delivery Time - 3PL service providers will surely have specialization in shipping services. Their significant delivery fleets will speed up the entire delivery process and provide same-day delivery to your customers.
- Reverse Logistics - It is very disheartening when the customer returns your product. But, it is a part and parcel of the business. In addition, you do not have to bother to go and collect the returns as 3PL facilitation includes the reverse logistics in the deal.
What is Fourth Party Logistics Services (4PL)?
4PL fourth-party logistics service is an addition to the existing 3PL logistics services.
In this operational model, not just 3PL services are provided, but another supply chain facilitation is also given.
There is a management of resources, infrastructure, technology, and other concerning aspects of a particular business.
4PL logistics comprises one partner (company) who takes care of all the outsourced logistics along with accessing, building running, and designing the supply chain solutions.
What Are the Inclusions of 4PL Logistics?
Entire 3PL facilitation
Outsourcing 3pl logistics plays a vital role in supply chain management and contributes to achieving customer satisfaction without compromising the delivery cost and time.
Capacity utilization
A measure of how intensively time and resources like a machine, tool, worker, etc. are used to produce a good service.
Carrier performance
Optimized carrier management is the best solution in order to grow your business and remain competitive.
Network analysis and design
Strategic analysis of logistical networks is designed to minimize costs, maximize client service levels, and increase profits.
To accomplish these goals, strategic decision-making must be balanced between production, transportation, procurement, and inventory management.
Business planning and execution
The basic objective of any logistics strategy is to deliver the right products to the right customers at the right time, at least at a reasonable cost, with accurate planning and effective execution.
Project management assistance
The proper project management assists to plan, implementing, and checking the efficiency, effective flow, and storage of goods, services, and information from the point of origin to the point of consumption.
Reverse logistics
Efficient reverse logistics is prominent in supply chain management that moves goods from customers back to the sellers or manufacturers.
Reverse logistics start from the consumer's end, moving backward through the supply chain to the distributor or from the distributor to the manufacturer.
A proper strategy for logistics
According to the logistics, the strategy is to search for an efficient manner of distributing goods and maintaining an efficient and professional level of service.
All these services are possible with the control room and extensive resources as components included in 4PL.
Understand 4PL Logistics in Detail
If you are trying to understand the 4PL service in layman’s language, then consider it as a management layer. This layer addresses the 2PL, 3PL, and other supply chain requirements and takes the business to a new height of success. The idea is to integrate different attributes and distinct resources to put supply chain and IT systems at work for a company. There is a solution-oriented approach as the design is done as per the client’s demand.
Vendor management is another crucial aspect that is well-taken care of by the 4PL logistics service provider. Managing different vendors is a requirement of any business, but it can be really difficult without outsourced assistance.
So, 4PL caters to this need pretty well. The supply chain present in 4PL logistics is IT-enabled. There is a set-up of an end-to-end IT platform for the integration of supply chain clients.
The best part about 4PL for any business is, that there is only one partner to contact for all the management and operation needs.
Distinct industries like – Food and Beverage, Electronics, Oil and Gas, IT, Mining, Textile, and many more can make significant use of 4PL logistics services. Therefore, it is evident that 4PL is surely a great solution for numerous companies out there.
What Is the Major Difference between 3PL and 4PL Services?
Although both 3PL and 4PL are relevant terms in the world of outsourcing of eCommerce logistics as well as fulfillment, still there are many differences.
So, read further with us to understand the differences in both logistics services that follow separate channels for goal fulfillment.
3PL Services
- 3PL is a logistics facilitation with the ownership of transportation and warehouses.
- The business owners are directly involved in working in the case of 3PL logistics service.
- 3PL logistics service focuses on logistical aspects of the business and also manages daily operations.
- Third-party logistics are meant to be used by small to medium businesses.
- Third-party logistics is more inclined towards a specific niche and has a limited perspective.
4PL Services
- There is no asset ownership in 4PL logistics services.
- The entire supply chain, including the functionality of 3PL, is handled by the 4PL service provider.
- 4PL takes care of the logistics and the fulfillment while managing optimization and integrations.
- Fourth-party logistics are highly beneficial for medium to large businesses.
- The fourth-party service provider offers a wide range of solutions and can cover all the aspects of 3PL facilitation as well.
