4PL (Fourth-Party Logistics)

A firm that assembles the resources, capabilities, and technology of its own organization and other organizations to design, build, and run comprehensive supply chain solutions.

What is 4PL (Fourth-Party Logistics)?

4PL, or Fourth-Party Logistics, is a practice where a company outsources its entire supply chain and logistics management to a specialized external provider. Unlike traditional logistics models where a company manages its own supply chain operations or works with third-party logistics providers, the 4PL model involves a higher level of collaboration and integration. The fourth-party logistics provider acts as a strategic partner, overseeing and optimizing the entire supply chain on behalf of the company. This includes managing various third-party logistics providers, coordinating activities, and leveraging technology to enhance efficiency and visibility across the supply chain network. The ultimate goal of a 4PL arrangement is to streamline operations, reduce costs, and improve overall supply chain performance. By entrusting the management of the entire supply chain to a dedicated partner, companies can focus on their core competencies while benefiting from the expertise and resources of the fourth-party logistics provider.