Logistics is among the many aspects of a company that require an efficient operation. Whether you’re a large company or a small business, a comprehensive logistics strategy is crucial in reaching organisational goals, such as optimising costs, boosting revenue, and improving customer experience.
Due to the pandemic, the way we shop, work, and study are forever changed. And although online shopping was popular even before the global health crisis, it was taken to another level and became the new norm.
With this change in trend came greater demands and higher expectations from customers. Quick delivery, free shipping, easy return and refund, and real-time tracking of order status, among others. Customers want a positive shipping and delivery experience—one that extends beyond free.
This is where a reliable 3PL or 4PL logistics partner comes into play. Knowing the difference among logistics providers and how each can impact your supply chain is important to making the right decision. Remember, the right logistics partner directly impacts customer experience and is critical to advancing as a business.
But first, what is 3PL and 4PL logistics? What is the difference between 3PL and 4PL? Decision-making can seem like a daunting task if you don’t know the basics, so we’re here to make it a bit easier.
Third-party logistics, better known as 3PL, is a strategy that allows you to outsource certain services. These services include warehousing, inventory management, freight forwarding, customs brokering, packaging, and delivery.
Although the 3PL provider is responsible for a great amount of often-tedious logistics tasks, you maintain the duty to oversee your entire supply chain. In simple words, 3PL providers serve as middlemen between the carriers and your business.
Often, 3PL providers have their own facilities or have already established a relationship with carriers. Small and medium businesses may benefit from 3PL, which can help achieve efficiency and growth.
The key difference between 3PL and 4PL logistics is the level of control your provider has. Having said that, what is a 4PL provider?
4PL or fourth-party logistics provider is more advanced, offering more features and services than just inventory, warehousing, and freight forwarding.
A 4PL partner provides services related to all aspects of the supply chain, including finance, IT, network analysis, project management, and procurement. A 4PL is a comprehensive solution to complex supply chain requirements and oversees all supply chain operations.
A 4PL provider acts as the single point of contact for all your logistics and supply chain concerns. Large corporations, in particular, may benefit from 4PL logistics.
When it comes to 3PL and 4PL providers, there’s no one size fits all. What may have worked for one business may not work for you. However, that doesn’t mean you can just pick any provider that you stumble upon.
Below are some key factors on what to consider when choosing between 3PL freight provider or 4PL freight provider.
Cost reduction – In what area do you want to reduce cost?
Focus – Are you satisfied with your supply chain’s efficiency?
Control – How much control over your supply chain do you want?
Ask yourself: should I work with a 3PL or 4PL? In the end, you need to identify and understand the transport needs of your business before choosing a logistics partner.
Choosing between 3PL and 4PL can be challenging and require extensive research, but it doesn’t have to remain that way. As Australia’s leading expert in the freight industry, Cario understands the importance of having the right freight provider to help businesses achieve their goals.
Cario is designed to help you with your freight and supply chain needs by identifying which logistics model you can benefit the most from—3PL or 4PL, and helping you achieve the outcomes you need.
Built with modern, powerful technology, Cario aims to be the single system that your business needs to execute supply chain operations. It simplifies the process of quoting, booking, and tracking freight while also providing real-time visibility of all freight costs and consignments.
Cario excels in the areas of automation, optimisation, transparency, and visibility—all of these are essential to improve efficiency, enhance customer experience, and promote business growth.
Cario recognises what is the difference between 3PL and 4PL. Whether you’re just starting a business, running a mid-sized company, or managing a large organisation, the Cario Freight System is here to help with both 3PL and 4PL logistics services.
Ready to take your logistics and supply chain operations to a whole new level? Contact Cario today to learn how you can set up a freight management system that suits the unique needs of your business.