What are the Differences Between a 3PL and a 4PL?

Shipping can require various components due to the nature of your logistical needs. It isn’t always as simple as getting products from one point to another. You may need help and that’s where logistics companies come in. However, you need to know the different types of logistics companies and what they offer. Third-party logistics (3PL) and fourth-party logistics (4PL) are two of the most popular options and each provides similar services along with a few unique features. It’s important to understand the differences between the two types before partnering up with a company.  

What is a 3PL?

A 3PL is a company that primarily handles the logistics between a sender and a receiver. The services provided by a 3PL are simply to coordinate the transport of freight. If there are hiccups in the transportation then a 3PL can store the freight, but then that would be the main focus for them. In the period of time that the products are picked up until they are delivered is what a 3PL is responsible for.  

What is a 4PL?

The most important aspect of a 4PL is to strategically provide the best services for the best value. A 4PL organizes not only what 3PLs are hired to do, but also all other parts of what your business requires for its supply chain. Their consultation will be highly justified because of their complete oversight into the supply chain. 4PLs can manage the operations of partners and supplies and allow more transparency in functionality. A 4PL can also act as a middleman in speaking to your 3PL to organize processes like distribution, data assessment and inventory planning.  

The Key Differences Between a 3PL and a 4PL

Although there are quite a few similarities between a 3PL and a 4PL, you must be aware of the differences between the two as well. A 4PL can take full control of logistics operations for you and ensure that all management bases are covered. A 3PL handles the day-to-day operations of providing labor resources to manage logistics. What this means is that 3PLs deal with only one aspect of your supply chain, whereas a 4PL manages their clients’ entire supply chain. 

In addition, a 4PL provider can handle the work 3PLs do but take it a step further. Their goal is to make the supply chain efficient for their customers. Therefore, in addition to subcontracting logistical and transportation services like 3PLs, 4PLs will take control over all supply chain management. Since 3PLs have a simpler supply chain, they can handle their customer base in the appropriate collaborative measure. 4PLs must handle more complex functions by coordinating with vendors who own modes of transportation or warehouses. This makes 4PLs much more effective for larger size businesses while 3PL providers can work on smaller businesses.  

 If you need a 3PL service, then you should check out HTL Freight. We have the experience and expertise required to make your shipping operations run smoothly. To find out more, you can contact us. Additionally, if you want to get started today, you can click here and request a freight quote.