Fourth-party logistics (4PL) are companies that provide outsourced supply chain management services. As the name suggests, 4PLs act as an intermediary between suppliers and customers – augmenting, supporting, expanding, and running an entire company’s logistics operations. The benefits of using a 4PL network are:
- Reduced supply chain complexity
- Improved data visibility
- More supply chain efficiency
- Cost Savings
Many companies choose a 4PL to support the existing logistics process, often because of the following reasons:
- A lack of internal resources or expertise in order management or distribution
- Inability to provide an adequate level of service due to size constraints within the company
- Concerns associated with outsourcing customer data and intellectual property
- Problems related to IT project failures
Using a 4PL allows companies to use an existing network of resources, avoiding the pitfalls and problems associated with developing internal capabilities for this type of activity.
The partner is responsible for assessing, planning, and executing transportation tasks. When building out a 4PL network, it’s essential to understand the key features. These include:
Managing the Entire Logistics Process
4PLs provide a range of services from planning and executing the logistics process to warehousing, inventory control, distribution, and more. A 4PL partner will manage everything from initiating a shipment order to the final delivery according to your requirements.
Streamlining Global Logistics Processes
4PL partners can help you navigate through global regulations quickly and easily by creating and maintaining relationships with carriers, shippers, and customs. 4PL networks will manage all your freight forwarding needs, including vendor evaluation, carrier selection, shipment coordination, documentation processing, and more.
Supplying Chain Integration
4PL partners have the resources to integrate their services into existing supply chains across several business units – virtually connecting your company’s entire supply chain end-to-end.
With 4PL partners, your company will gain access to more information about the status of your shipments. It means you can make better decisions about your business. The moment a load is invoiced or even before it leaves the vendor’s dock, for example, you’ll be able to track it, allowing you to respond quickly.
Availing Well-defined Service Level Agreements (SLAs)
4PL partners are responsible for ensuring that your company’s service level agreements are met. SLAs typically include an upper limit on the time it takes to get goods from point A to point B, as well as a guaranteed rate of customer satisfaction.
A 4PL Network enables manufacturers to concentrate on their core business activities while the 4PL handles the operational tasks necessary for growth. From manufacturers to wholesale distributors and retailers, most companies use a network of fourth-party logistics partners as a strategic solution to increasing capacity, speeding up delivery time, and providing flexible solutions that fit any budget.
A 4PL should bring along proven results. It has to manage processes, technology, and people across the organization and optimize logistics performance. Because 4PLs don’t own transport vehicles or employ drivers, they must coordinate with vendors and customers to ascertain the correct loads and deliveries. 4PLs must also accurately forecast future capacity needs.
For an effective partnership that guarantees positive results, both parties must understand their responsibilities and apply the right lean operation tools to improve performance. Global Warehouse Solutions enables you to meet your customers’ expectations and achieve a competitive advantage.
We offer turnkey solutions for your distribution operations, allowing you to scale up or down as necessary, meet seasonal demand, and focus on what you do best – running your business. Contact us for a 4PL network that brings the best practices of lean logistics to your company.