Fourth-party logistics (4PL), explained

What is 4PL?

A 4PL is a fourth-party logistics provider and it essentially takes third-party logistics a step further by managing resources, technology, infrastructure, and even manage external 3PLs to design, build and provide supply chain solutions for businesses.

4PL services typically encompass 3PL services as well as:

• Logistics strategy
• Analytics including transportation spend, analysis, capacity utilization, and carrier performance
• Freight sourcing strategies
• Network analysis and design
• Consultancy
• Business planning
• Change management
• Project management
• Control tower and network management services, coordinating a wide supplier base across many modes and geographies
• Inventory planning and management
• Inbound, outbound and reverse logistics management

4PL examples

Deloitte provides 4PL services that go above and beyond traditional 3PL by offering strategic business insights and consultative services in addition to logistics execution.

Pros of 4PL

• Outsource the entire logistics segment of a business
• Take advantage of strategic advice in addition to operational support

Cons of 4PL

• Little control over logistics and fulfillment processes
• Likely to be expensive

4PLs are a relatively new concept, but typically they’re sought out by medium to large sized businesses that are seeking a complete logistics solution from both an operational and a strategic perspective.

Read next

Third party logistics (3PL)