A fourth-party logistics partner is a type of third-party logistics that are allowed to subcontract out a part of its responsibilities. In short, when a 3PL outsources any portion of its duties to a separate party, it becomes a 4PL.
There is a significant difference between 3PL and 4PL. With fourth-party logistics, an indirect subcontractor conducts some parts of the logistical services. More precisely, when you trust the primary contractor to manage other companies to deliver the service, your control and oversight are limited. However, there is an extra level of trust while dealing with fourth-party logistics as you are trusting the contractor to manage services on your behalf. The use of fourth-party logistics offers new options for manufacturers while addressing their logistical needs such as warehousing, transportation, distribution, customer service, and even sales. You can contact such services specialists to carry out tasks that can both save money and also offer a higher level of precision in service. Moreover, hiring fourth-party logistics frees up internal resources, which allows you to focus on core competencies. According to Allied Market Research, the global fourth-party logistics market is expected to reach $111.7 billion by 2031, growing at a CAGR of 6.7% from 2022 to 2031.
Perks of fourth-party logistics:
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Chief editor of review team at FinancesOnline Alex Hillsberg is an expert in the area of B2B and SaaS related products. He has worked for several B2B startups in the past and gathered a lot of first hand knowledge about the industry during that time.
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