What Is Fourth Party Logistics?

Most manufacturers and distributors are familiar with third-party logistics (or “3PL”): a company to which aspects of the transportation and logistics process can be outsourced. This has become a go-to solution for many firms, especially those hoping to sidestep the myriad complications of creating and managing their own intricate networks for inventory and shipping. But, increasingly, fourth-party logistics (or “4PL”) offers a viable alternative.

Think of a 4PL provider as the coordinator of your supply chain. This organization is responsible for designing, establishing, testing, and running an entire network of third-party providers, custom-built to your needs and specifications.

Why Use Fourth-Party Logistics?

You may be thinking, “This sounds like just another layer of complications. Why should my firm even consider using 4PL, especially when we’ve used a third party provider (or even an in-house system) for so long?”

It’s true that many businesses have readily adopted 3PL outsourcing as standard operating procedure, but don’t think that this option is without its risks. Not all third-party providers are equally capable of managing your needs, and (since they aren’t in-house) there is a lack of immediate transparency regarding their true abilities. You may need to do some digging and prodding in order to get the full picture, and if you aren’t perfectly clear with regards to what the same service would cost you to operate – well, let’s just say that not all companies are fiscally honest.

Add to this the fact that your company might be looking to outsource more than one aspect of the logistics process – transportation as well as inventory management, for instance. Rather than juggling numerous contracts and praying that one provider doesn’t suffer a failure or setback that impacts the entire chain, it might be best to work with a single, trusted partner who can draw upon extensive experience in logistics management – and who understands how to build supply chains with safeguards.

Bonded Service is Georgia’s premier provider of inventory, storage, and transportation solutions, serving both the Atlanta and Savannah areas. Contact us today for a free consultation, or for more information on our services.