What is 4PL Logistics Services?

4PL logistics service has been around for a while, but it really took off with the emergence of Industry 4.0. 4PL companies are progressively being preferred over 3PL companies by large organisations with complicated distribution networks since they tackle the complete chain, particularly issues posed by technological advancements. There is a very fundamental difference between 3PL and 4PL logistics services.  4PL is a concept wherein companies delegate all aspects of their supply management and administration to a 4PL logistics service provider. As for 3PL logistics, the strategy involves manufacturers keeping control of their processes while outsourcing services like warehouse management, transportation, and packaging, among others, to a 3PL logistics company. 

Here are some reasons why 4PL services are picking up pace:

Medical Related Supply

In typical circumstances, medical supplies must be delivered quickly from producers to health care providers and medical facilities. During a pandemic, this need is amplified tremendously. While 3PLs can always help with this service, 4PLs specialize in fulfilling fast turnaround timeframes and seemingly insurmountable timetables while utilising cutting-edge technology to track supply chain processes on a real-time basis. When it comes to medical-oriented requirements, time is of the essence, and 4PL delivers on the same effortlessly.

Shipping of Perishables

Transferring and preserving highly perishable food products necessitates sophisticated logistics that are out of reach for many businesses. Businesses frequently resort to 3PL or 4PL organisations for warehousing, transporting, and distribution network expertise to handle their food supplies and shipping. However, specialized 4PLs, with their vast and extensive supply chain experience, are frequently better equipped to ensure that waste is reduced for larger enterprises with heaps of goods to carry and maintain. This helps a lot in the long term.

Boosting E-commerce

With the increase in demand for quick delivery caused by Covid-related curfews and travel bans, businesses and E-commerce enterprises started focusing more and more on providing one-day and same-day deliveries. While 3PL logistics companies can satisfy consumers’ needs by providing quick delivery, 4PLs are ideally positioned to meet faster delivery requirements, minimize wasted opportunities, and, most crucially, monitor same and one-day restocking. This is possible since they manage their client’s whole supply chain. With the proliferation of E-commerce firms, it is critical that organizations pace up with what consumers demand. Failed delivery dates or inventory depletion sans restocking sends a negative message to clients, thereby driving them away.

Industrial Requirements

Industrial organizations have begun realising the advantages of handing over the keys of their logistics needs to a 4PL firm that not only offers the required services but also handles critical accounting, generally through a supply management platform that tracks key performance metrics and benchmarks in one place. In fact,  Amazon is the best representation of a 4PL system because it provides all that a 4PL supplier should do – it keeps the products in its warehouses, has a website, collects and delivers items to customers, and assists with transactional technology. Amazon’s popularity among sellers also stems from the fact that it streamlines the selling procedure, making it easier for all parties involved.

Furthermore, a 5PL logistics model is already coming up, and we can expect to see more of that in the near future. If your company requires help with warehousing, transportation, and fleet management, you should consider partnering with Varuna Group. To know more about them, click here!