Do you require assistance navigating the convoluted field of logistics? A key element of any competitive strategy is supply chain optimization due to the rise of e-commerce and the globalization of the market.

The providers of third-party logistics (3PL) and fourth-party logistics (4PL) are your means of creating a supply chain that is both streamlined and effective. However, how would one decide between the two? 

To assist you in selecting the best 3PL or 4PL for your company, Worldcraft Logistics will go deeply into the worlds of these logistics providers and explain their roles, duties, and distinctions in this post. 

A fourth-party logistics provider (4PL): What is it?

In comparison to third-party logistics providers (3PL), a fourth-party logistics provider (4PL) is a logistics partner that assumes a greater level of supply chain management. An end-to-end logistics provider, technology integration, 3PL management, and supply chain process optimization are all handled and coordinated by a 4PL business.

WHAT ARE A 4PL'S RESPONSIBILITIES?

The functions and responsibilities of a 4PL (fourth-party logistics) organization must be understood in order to make an informed decision about which logistics provider is appropriate for your company. 4PLs may completely transform your supply chain, from managing 3PLs to overseeing your entire logistics organization.

THIRD-PARTY LOGISTICS PROVIDER (3PL): WHAT IS IT?

An organization that specializes in different logistics services, like order fulfillment, transportation, and storage, is known as a 3PL (third-party logistics provider). 3PLs act as a go-between for your business and the carriers who deliver your goods to clients. Read our earlier post, 3PL vs. In-house: What's the Difference, to find out more about 3PLs.

• 3PL MANAGEMENT: Direct and oversee the operations of several 3PL partners.
• OPTIMISE OPERATIONS: Constantly seek out ways to save costs and improve operational effectiveness.
• COORDINATE SERVICES: Make sure that all logistical suppliers are working together and communicating effectively.
• INTEGRATE TECHNOLOGIES: Apply cutting-edge technological solutions to raise supply chain visibility and control.
• ENTIRE SUPPLY CHAIN MANAGEMENT: Create and carry out all-encompassing logistics plans.

What difference does the 4PL have from 3PL?

To better understand the difference between 4PL and 3PL, we have some small comparisons below, please take a look:

What difference does the 4pl have from the 3pl? Businesses that sell online work directly with their 3PL partner, who oversees the whole fulfillment process, when they outsource fulfillment to them. E-commerce companies delegate fulfillment to a single third-party logistics (3PL) partner in order to avoid warehouse management and save time on inventory, box packaging, and delivering orders.

As they oversee the connection with the 3PL in place of the merchant, a 4PL creates an extra layer of separation between them. The following are the main distinctions between a 3PL and a 4PL.

Order fulfillment

Order fulfillment, which includes warehousing, selecting and packing orders, and shipping parcels, is the main focus of a 3PL. By overseeing every aspect of the supply chain, including technology, fulfillment, and transportation, a 4PL goes above and above. When a merchant works with a 4PL company, they collaborate directly with the 4PL to address any problems that may emerge with other vendors and the supply chain as a whole.

Supply chain optimization

In contrast to a 4PL, a merchant can collaborate directly with a 3PL to develop ways to maximize fulfillment by forming a partnership with them. One 3PL that works with retailers to determine which fulfillment center locations to stock merchandise at is WorldCraft Logistics. The company bases its decision on the locations of its clients.

Because a 3PL uses a warehouse management system (WMS) to run every fulfillment center location within its network, merchants have access to data and analytics, including shipping and demand forecasting capabilities, to help them make better decisions. As a single source of truth, real-time inventory levels may be monitored and seen from a single dashboard.

Consumer correspondence

All correspondence between the various 3PLs and the merchant is routed through the 4PL, which serves as the primary point of contact. Since the 4PL serves as an intermediary in this process rather than the merchant interacting directly with the 3PL, there may be delays in addressing difficulties. There is no ownership at the 3PL level when using this kind of customer service, which might be annoying for the retailer.

You get access to the same customer support staff (and, in certain situations, a dedicated account manager) when you work with a 3PL partner. In this manner, problems are fixed more quickly, and you can collaborate with a team that is knowledgeable about your account.

What differences do the 4PL and 3PL procedure have?

The primary goal of a 3PL's procedure is to carry out particular logistics tasks. They furnish the infrastructure and resources required to transport goods through the supply chain effectively.

However, a 4PL's procedure has a more strategic stance, supervising and controlling the complete supply chain. By utilizing cutting-edge technology, data analysis, and supply chain engineering, they optimize your logistics operations and boost overall performance. 

Their respective degrees of accountability and control are the main distinction between the two. This is how each procedure proceeds.

The 3PL procedure

• RECEPTING INVENTORY: Acknowledge shipments from vendors and verify that the items were delivered correctly.
• WAREHOUSING: To guarantee simple access and recovery, store goods in an orderly and effective manner.
• INVENTORY MANAGEMENT involves keeping track of product levels, keeping an eye on stock movements, and keeping correct records.
• ORDER PROCESSING: Acquire, handle, and get client orders ready for delivery.
• SHIPPING: Work with carriers to plan transportation, ship goods to clients on schedule, and adhere to delivery requirements.
• RETURNS MANAGEMENT: Manage reverse logistics to restock products or get rid of them, as well as handle product returns and refunds.
• REPORTING & ANALYTICS: To assist clients in making defensible decisions, offer information and analysis on inventory management, order fulfillment performance, and warehouse operations.

The 4PL procedure

• STRATEGY DEVELOPMENT: To maximize supply chain performance, analyze logistics needs and create a customized plan.
• SELECTION OF PROVIDER: To guarantee effective operations, identify, pick, and oversee the top 3PLs and other service providers.
• INTEGRATION & COORDINATION: Coordinate and manage all logistics tasks across various suppliers to ensure efficient execution.
• TECHNOLOGY IMPLEMENTATION: To provide real-time visibility, communication, and analytics, deploy and maintain cutting-edge technology solutions.
• SUPPLY CHAIN OPTIMIZATION: Constantly evaluate and enhance logistics procedures, locate bottlenecks, and put economical solutions in place.
• PERFORMANCE MANAGEMENT involves keeping an eye on key performance indicators (KPIs) and giving clients data-driven insights to help them make wise decisions.
• COLLABORATION & INNOVATION: To promote ongoing supply chain innovations and improvements, collaborate closely with you and your logistics partners.

How can 3PLS and 4PLS work together?

Together, 3PLs and 4PLs provide an end-to-end supply chain solution. As a strategic orchestrator, the 4PL oversees the whole supply chain and coordinates the 3PLs' logistical work. The 4PL is able to maximize cost-effectiveness and efficiency in supply chain operations thanks to this collaboration.

The 4PL helps 3PLs improve their efficiency and streamline their operations by providing advice and assistance. Both the 4PL and the 3PL are essential to this collaboration; the 4PL handles strategic integration and oversight, while the 3PL handles particular logistics services. A highly effective and well-managed supply chain is guaranteed by this cooperative cooperation.

Which is best for your business: 3PL or 4PL?

Selecting a 3PL or 4PL supplier for your company requires evaluating a number of variables that affect the effectiveness of your supply chain. We've put together a list of important variables to take into account when choosing a logistics provider to meet the goals and demands of your business.

Essential factors to consider

• BUSINESS SIZE & COMPLEXITY: 3PL partners may be more advantageous for smaller companies with less complicated supply chains. Businesses at the enterprise level with complex supply chains could need the all-inclusive management provided by 4PL partners.
• CONTROL & PARTICIPATION: A 3PL partner can be a preferable option if you'd like to keep more direct participation and control over your supply chain management. On the other hand, a 4PL partner can be more appropriate if you would rather assign logistics operations to an outside specialist.
• SCALABILITY: Using a 3PL may allow you more flexibility to adjust to changes if your company expects to develop significantly in the future. For firms that require thorough administration and coordination among numerous 3PLs, 4PLs can be a better option.
• COST: Because of their experience and the wider range of tasks they do, 4PL partners usually charge extra for their services. When selecting a 3PL or 4PL partner, take your budget and the possible return on investment into account.
• TECHNOLOGY INTEGRATION: Four Point Logistics (4PLs) are renowned for their proficiency in incorporating cutting edge technology into supply chain management to enhance efficiency and control. If you're looking for strong technology integration, a 4PL would be more appropriate. Learn how WorldCraft Logistics combined its distinctive Transport Management System with international technology by reading Dell EMC's case study.
• GEOGRAPHIC REACH: The geographic reach of your possible logistics partner is an important factor to take into account, depending on the size of your company. While 4PLs often provide worldwide coordination and management, some 3PLs may be more localized in nature.
• SERVICE RANGE: 3PLs typically offer specialized services including order fulfillment, transportation, and warehousing. On the other hand, 4PLs oversee a wider range of services, which include managing several 3PLs, optimizing the supply chain, and coordinating various logistics tasks.

WorldCraft Logistics (WCL) potential assistance

We are your go-to source if you need more from a 3PL than just picking and packing. WorldCraft Logistics (WCL) is your company's end-to-end fulfillment partner, enabling you to achieve more as your enterprise expands. 

WCL is a multichannel order fulfillment platform that operates on a genuinely global scale. WCL is a one-stop shop for outsourcing fulfillment right out of the box. You have complete access to our:

• One-stop logistics platform with free reporting and analytics features

• Numerous native connections with top e-commerce platforms and connections

• Our worldwide fulfillment center network

• Negotiated pricing for carriers

• Excellent support

• With a ton more!

Our goal is to make you more successful online, and since your demands are ever-changing, we're always coming up with new features, capabilities, channels, and integrations for our clients and expanding our fulfillment centers to better serve you in the long run.

We achieve this by carefully considering consumer feedback to identify practical lessons learned. We've made the following improvements to our fulfillment system and infrastructure in response to client requests: 

• Worldwide places as requested by our clients 

• Retail dropshipping (shipping orders placed on retailers' websites) and EDI compatible B2B orders

• Personalization of orders, encompassing personalized gift notes, inserts, and packing

• Additional services with a higher value, including kitting and processing returns

Easy, adaptable 3PL pricing

WCL wants to make complicated 3PL pricing simpler. For ease of cost calculation, we have combined selecting, packaging, and shipping into a single line item in our total fulfillment cost model: 

• The first four picks in an order are free of charge; picks five through nine are $0.20 each.

• There is no cost for packing or conventional packaging supplies.

• The package weight, dimensions, shipment speed, destination, and other variables all affect how much shipping will cost.

Additionally, you won't be charged line items at WCL for:

• Regular packing

• The software from WCL (which includes integrated analytics, among other things)

• Excellent support

• Account management that is committed (for large customers)

Along with these value-added services, we also provide B2B ordering, kitting, returns processing, and much more. For a further explanation of our prices, see below, or get a quote customized to your needs!

Why 3PLs like WorldCraft Logistics (WCL) are trusted by small and medium-sized organizations

WorldCraft Logistics provides on-demand logistics solutions, top-notch technology, and unparalleled client service and experience. It is a 3PL rather than a 4PL.

It can be expensive, time-consuming, and challenging to handle fulfillment on your own. Working with a 4PL can result in even less control and irregularities.

WCL assists rapidly expanding e-commerce companies in scaling their operations with logistics comparable to those of Amazon.With WCL, you may still have complete transparency and visibility throughout the whole supply chain while saving time and money over time in logistics.

WorldCraft Logistics makes it simple to grow into new areas based on where your customers are thanks to an international fulfillment network that is powered by the same WMS. From a single dashboard, you can monitor real-time inventory tracking, examine inventory allocation, and assess SKU performance. Along with giving you access to our analytics and reporting tool so you can make data-driven decisions, you also get control over your supply chain.

Finally, WorldCraft Logistics gives users access to a first-rate customer service staff. You always have access to support from a team that knows your needs, no matter where you store inventory. This guarantees prompt resolution so you may continue operating your business as usual.

Conclusion

You have choices for managing your supply chain regardless of the size of your company. While a 4PL can handle your whole supply chain, a 3PL is the most popular logistics provider.

Beyond simple fulfillment, the ideal 3PL partner would collaborate with you to optimize your supply chain and support you in making more informed business decisions.

Working with thousands of direct-to-consumer brands of all sizes, WorldCraft Logistics is a tech-enabled third-party logistics provider that helps clients achieve greater success online.

To find out more about how WorldCraft Logistics can support your expanding company, submit a quote request using the button below.  Read this review to find out more about WorldCraft Logistics' capabilities in comparison to those of other 3PLs.