The Difference Between 3PL and 4PL

Posted by Port City Logistics on Nov 26, 2019 3:04:11 PM

In the world of logistics, a large number of terms, abbreviations, and slang can confuse any outsider. To those unfamiliar, 3PL (third-party logistics) companies like Port City Logistics and 4PL (fourth-party logistics) companies like Deloitte operate similarly, yet have a few small differences that force them into different categories. 

march 19What exactly is 3PL?

According to Hollingsworth LLC’s article, “What is 3PL?”, 3PL is described as “the process of receiving products from manufacturers, guiding it through the supply chain, and then delivering the products to the consumer or retailer," (Tran). 3PL acts a wide integration of a company’s warehousing and logistical needs into streamlined customization of services.

Additionally, a 3PL works to keep visibility for the customer’s supply chain so the customer may understand information by using a 3PL’s real-time tracking services.  

How does this differ from a 4PL? 

While 3PL uses one client to move products throughout the supply chain, 4PL can use a large number of 3PL chains to execute logistic services. According to Steve Raetz of C.H. Robinson Transportfolio, this difference is: “A 4PL most often focuses on the design and execution of business processes and oversight of the moving parts of a business’ supply chain, oftentimes collaborating with multiple 3PLs (transportation and warehouse 3PLs), asset-based carriers, and warehouses utilized by the business.” Though this may seem like a better deal on the surface, the differences between the two logistic styles play a major role in the day-to-day operations of your business. 

Why should I choose a 3PL over a 4PL?

Simply, the best explanation can be seen in the difference between the two styles.

First, by hiring an experienced 3PL like Port City Logistics as your preferred provider, you gain the expertise and knowledge of the supply chain process. The multiple layers, mounds of paperwork, and major challenges of logistics quickly become obsolete; without a 3PL, operating your business without a streamlined process can quickly leave your company with unnecessary added responsibilities. 

Next, saving time and money should be the primary reason any company chooses to shift to a 3PL. Using a 3PL eliminates the need to invest in warehouse space, technology, or employing warehouse security staff. With a 3PL, these costly items all become regulated through one company.

Finally, the flexibility a 3PL can provide outweighs a 4PL’s by far. While a 3PL deals with only themselves as a single entity, a 4PL must go through multiple layers of changes. For a business looking to work through the heavy workflow of the holiday season, a 3PL can scale operations to meet the specific needs of a client. For a company that is hit hard in the final months of the year and later needs to scale back to fit its normal flow of goods, a 3PL like Port City can accommodate the needs, unlike a massive 4PL can. 

In the complex operations of world logistics, don’t fall behind in your company's’ operations; by hiring Port City logistics as your choice 3PL, we can revolutionize your shipping needs into a stress-free process that accommodates all of your heeds.

If you’d like to know more about our 3PL process, please download our guide at this link or contact us today to see what Port City Logistics can do for your company.  

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Topics: Third Party Logistics (3PL), Supply Chain Efficiency, Warehousing