What is the difference between 3PL logistics and 4PL

Competition and globalization processes in world markets force companies to constantly seek opportunities to reduce costs, increasing market share and increasing its value. Outsourcing and building partnerships in supply chains have become the main methods of creating a competitive advantage. In the field of logistics services, outsourcing has led to the creation of companies called 3PL ( Third Party Logistic Provider). Expansion of operations to emerging markets leads to increased demand for logistics services and increased interest in 3PL services. But the international logistics market does not stand still but is developing dynamically, and the next stage in the evolution of outsourcing services in the field of logistics is the transition from 3PL to 4 PL ( Fourth Party Logistics ). What is the difference between them and why 3PL and 4PL logistics are very popular? Let's see.

What is 3PL logistics?

External logistics provider in the 3PL business model – trade Organization, performing a number of logistics operations separately or in a complex, reported on https://partnertrade.org/chto-takoe-3pl/. This usually includes transportation, storage, order fulfillment and distribution. Companies turn to 3pl operators for help, if the task is:

• Transportation of goods within the country and abroad;
• Safe storage of goods;
• Cargo escort, including registration of a full package of documents
• Solution of problems, related to the passage of customs clearance;
• Packaging of goods in accordance with international regulations.

Besides, 3pl provider takes over the payment processes, insurance, return of goods, and also provides consulting services.

Choosing a Partner Trede logistics operator of this category – the best solution for the client, working in retail, as well as cross-docking. The high quality of implementation of a wide range of services offered is facilitated by:

• An extensive network of warehouses in Europe and the world;
• Material and technical base;
• Qualified employees;
• Information support resources.

What is 4PL logistics?

Compared to the previous category, 4PL companies (fourth side of logistics, integrators of logistics processes or leading logistics operators) include more interaction structures, from purchasing to accounting. Actually, logistics operator 4PL takes over the planning and optimization of external and internal logistics of the entire enterprise.

In 4PL logistics, the cargo owner not only informs the third party about the place of departure and destination, but also defines the necessary criteria (eg, deadlines, budget, route definition). Many 4PL operators even provide specialized software as an integral interface for working with various companies in the customer's supply chain..

The nature and consequences of the interaction between a business and its consumer depend on the logistics service provider. And given the fact, that in the case of integrators of logistics processes (4PL) you outsource even more processes, it is very important to choose a reliable and trusted operator.

What warehouse functions do logistics operators offer??

Warehousing services in 3PL or 4PL logistics – this is the storage of the client's goods in the right place for a specified period of time, according to previously agreed conditions. Often the warehouse considers not only storage itself, but also additional services, such as packaging, marking, repackaging, unloading / loading goods onto vehicles, etc.. d. An alternative solution is the ability to store goods at the port or at the airport, but this is not a very good option, as it usually costs much more.

Warehouse services are very extensive, in addition, each client may have different requirements for the form and methods of storing their goods. The complex of warehouse services is also called fulfillment. Order fulfillment is in great demand among online stores as a business service. 3PL and 4PL operators can also provide fulfillment services . Execution includes:

• Storage of goods;
• Receiving and processing orders;
• Order picking and packing;
• Accepting payments from buyers;
• Delivery of orders;
• Processing returns.

Advantages of the 4PL business model over 3PL

Logistic integrator – this is a new level of logistics. The 4PL operator model is developed based on the concept presented in 1996 year by the consulting company Andersen Consulting, now Accenture, with the following interpretation:

"Logistic operator 4PL – this is the supply chain manager, which combines its resources, capabilities and technologies with technologies of another company and manages logistics, offering customers the most complete supply chain solution ".

so, First of all, 4PL works much deeper with the company, than 3PL, and takes on more commitments. In this way, company, outsourcing certain services, freed from the need to coordinate the work of several third-party companies.