Comparing 3PL vs 4PL. What is The Right Fit for Your Business?

Due to a wide range of factors including increased e-commerce, globalization, customer expectations, and supply chain disruptions, logistics needs have become significantly more complicated in recent years. As businesses work to adapt, many have turned to third-party logistics (3PL) or fourth-party logistics (4PL) providers for help optimizing and scaling their operations.

While many business owners may have heard of 3PLs and 4PLs, the actual differences between their logistics service levels may not be clear. In this post, we’ll break down the key differences between 3PL and 4PL and explain where they fit in the broader supply chain picture, so you can determine which model may be best suited for your business.

What Services Does a 4PL Offer?

A fourth-party logistics provider acts as a supply chain integrator that manages and oversees the entire logistics process on behalf of a company. Fourth-party logistics providers take on a high-level, strategic role, often coordinating multiple 3PLs and other service providers who handle order fulfillment and other logistics functions such as warehousing and transportation. Here’s what a 4PL typically offers:

1. End-to-End Supply Chain Management

A 4PL oversees and optimizes the entire supply chain from procurement and inventory management to distribution and reverse logistics.

2. Vendor and Partner Coordination

A 4PL acts as the single point of contact for all logistics operations, managing relationships and performance across multiple 3PLs, carriers, and technology platforms.

3. Technology Integration

4PL providers often bring advanced supply chain technology and data analytics to monitor operations, provide visibility, and identify areas for improvement across the logistics network.

4. Strategic Planning and Optimization

A 4PL provider’s role is more consultative rather than hands on, helping businesses design, implement, and continuously improve their logistics strategy for cost savings, efficiency, and scalability.

5. Custom-Tailored Solutions

A 4PL builds a comprehensive solution tailored to a company’s unique goals in order to align logistics with broader business strategies.

Put simply, a 4PL acts as a logistics architect and manager by helping businesses simplify complex logistics needs, scale efficiently, and focus more on their core competencies but they are a middle man. Businesses that work with 4PLs are essentially outsourcing part of their business operations and may not know who is actually handling their products.

What Services Does a 3Pl Offer?

3pl outsourcing logistics services help businesses manage specific parts of their supply chain. These services typically focus on the tactical, day-to-day operations required to move and store goods efficiently. There are many reasons for logistics outsourcing and third-party logistics providers are popular because they offer flexibility, scalability, and expertise without the overhead costs of managing logistics in-house. They also provide a direct relationship with your logistics provider. Here are the logistics advantages offered by a 3PL:

1. Warehousing and Storage

3PLs provide space to store products in the short-term or long-term, often in strategically located fulfillment centers.

2. Order Fulfillment

A 3PL’s warehouse team picks, packs, and ships customer orders, which is a huge weight off of e-commerce businesses. They also handle returns and exchanges.

3. Transportation and Shipping

3PLs manages the movement of goods, often coordinating with various carriers to ensure timely and cost-effective delivery.

4. Inventory Management

3PLs offer tools and systems to help businesses track inventory levels in real time, improve forecasting, and prevent stockouts or overstocking.

5. Value-Added Services

Many third-party logistics providers offer value-added services tailored to meet specific business needs, including kitting, labeling, assembly, and packaging customization.

3pl logistics benefits are many for businesses that want hands-on, personalized service and need support adapting to changes in demand, lowering shipping costs, and staying focused on growth instead of logistics.

G10 Fulfillment Offers Personalized Logistics Services

G10 Fulfillment handles your logistics in-house so you can focus on growing your business, knowing exactly who is handling your products and where they are being stored. G10 customers can also depend on personalized customer service, with a designated account coordinator and a customer service team always a phone call or email away for support.

By partnering with G10, you can dedicate all your energy to expanding your brand while we ensure your order fulfillment runs like clockwork. Our expert team and advanced technology streamline your operations, providing seamless integrations with top e-commerce platforms like Amazon, Shopify, and Walmart. With G10 Fulfillment, you gain a reliable partner committed to your success, allowing you to concentrate on what you do best: driving your business forward. If you’re looking for a 3PL warehouse near me, you’ll appreciate our network of warehouses around the country. Contact us today to get started.