Logistics Wordbook


Logistics Glossary

Fourth-party logistics (4PL) is a relatively new concept in the logistics industry, which involves the management of the entire supply chain by an external partner.

Not all 3PLs will transition into a 4PL, and the main reason is that they may not want to offer that specific service.  Companies may also offer just the 4PL service, where they have a network of 3PLs to do the physical work; the 4PL then provides the complete visibility piece to offer overall accountability of the supply chain to the customer. While Waredock is primarily considered a 4PL provider, we also offer 3PL services through our platform.

What is the difference between 4PL and 3PL?

The main difference between a fourth-party logistics (4PL) provider and third-party logistics (3PL) provider is that a 4PL handles the entire supply chain, while a 3PL focuses on logistics. This means that 4PL providers have the control and also accountability over the customer’s supply chain.

What is the difference between 4PL and 5PL?

In simple terms a 5PL provider is simply a 4PL that is managing multiple clients through multiple solutions and technologies. Typically a  5PL provider supplies innovative logistics solutions and develops an optimum supply chain network for its customers.

Examples of fourth-party logistics companies

UPS 4PL Services

UPS Supply Chain Solutions is one of the leading 4PL companies offering a full service portfolio or services including global supply chain design and planning, logistics and distribution, customs brokerage and international trade services.

XPO Logistics: 4PL Services

XPO offers fourth party logistics services to align your global supply chain with your long-term business strategies. XPO 4PL solutions can also help you achieve greater efficiency through disciplined supply chain education and training programs.

Geodis Wilson 4PL Srrvices

Geodis is a leading global provider of 4PL services with a growing practice non-asseted based logistics integrator offering.

Maersk 4PL Services

Maersk manages integrated supply chain services with 4th Party Logistics solutions.  NeoNav™ is a solution which covers physical and digital logistics worlds to give user end-to-end transparency, control, and decision-making capabilities.

What are some of 4PL trends?

Some of the top 4PL trends include:

  1. Technology adoption: Technology has been a driving force behind the growth of 4PL, with the increasing adoption of advanced technologies such as artificial intelligence (AI), machine learning (ML), and blockchain. These technologies can help optimize supply chain processes and provide real-time visibility, which is essential for effective supply chain management.
  2. End-to-end supply chain management: 4PL providers are increasingly taking on more responsibilities and managing the entire supply chain, including transportation, warehousing, and distribution. This allows businesses to focus on their core competencies while benefiting from the expertise and resources of a 4PL provider.
  3. Sustainability and environmental concerns: There is a growing emphasis on sustainable and environmentally friendly supply chain practices. 4PL providers are increasingly incorporating sustainability initiatives into their operations, such as optimizing transportation routes, reducing carbon emissions, and minimizing waste.
  4. Collaborative partnerships: Collaboration and partnerships are becoming increasingly important in the 4PL industry. 4PL providers are partnering with other logistics providers, technology companies, and other stakeholders to create more efficient and effective supply chain networks.
  5. Demand for flexibility and scalability: The pandemic has highlighted the need for flexible and scalable supply chain operations. 4PL providers are increasingly offering solutions that can quickly adapt to changing market conditions, such as providing additional warehouse space, or adjusting transportation routes.

In summary, 4PL is evolving rapidly, and businesses that adopt these trends and partner with the right 4PL provider can gain a competitive advantage by achieving greater supply chain efficiency, flexibility, and sustainability.

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