What are the Benefits of 4PL?

The 4PL companies have a comprehensive role within the supply chain, as they have much broader responsibility than 3PL companies and have greater accountability in helping businesses reach their strategic goals. Some of the significant benefits of associating with 4PL companies include the following:

• Client-centric Approach – 4PL service providers design the logistic solution aligning with the client’s requirements encompassing the entire distribution chain. Besides, the 4PL service providers are experts in rendering comprehensive operations in distribution, warehouse, logistics, and IT and address every aspect to come out with the best solutions.
• Single Point of Contact – 4PL service providers are a single point of contact between business and their supply chain process. They oversee and manage the complexities of the logistic operations of companies. A 4PL service provider coordinates every logistics step, from sourcing material and manufacturing considerations to finding apt solutions; they provide a distinct look into the business’s overall supply chain operations.
• Manage Multiple Vendors – Managing multiple vendors of the distribution chain is often complex for businesses, but this task is eased with a 4PL service provider around. They manage the complete eco-system of vendors covering all aspects of the supply chain like warehousing, procurement, distribution, transportation, and IT.
• Support Company’s Growth – 4PL service providers lead to the growth of the business. They have good relationships within the chain of supply, enabling them to assist enterprises during growth and expansion. They build trusted networks to support the growing logistics need of the company and hence possess good terms with national and international partners. Thus, they can develop a system for smoothly executing the goods.

Advantages & Disadvantages of 4PL

Advantages of 4PL

A 4PL logistic company handles the entire logistics operation of a business along with its strategic development and associates with 3PLs to outsource part of the transportation and logistics activities. A 4PL company as a strategic, operational, and technology partner brings about significant changes in the logistics processes resulting in greater efficiency and cost-effectiveness. Some of the considerable benefits of associating with a 4PL company include the following:

• Better visibility over the supply chain
• Low procurement costs
• Better market transparency for goods and services
• Reduced order cycle times
• One-stop solution for contacting supply chain vendors
• Minimum inventory wastage

Disadvantages of 4PL

One of the significant disadvantages of a 4PL service is that businesses have minimal control over their products’ logistics and fulfillment process. Besides, it also generates high dependency on the 4PL company in the long term, as the 4PL company fulfills all vital activities to transform the supply chain of businesses that creates a dependency on the 4PL company. 4PL Service may not seem to be a cost-effective option for small and medium-sized companies.