Believe it or not, most companies can still not tell you exactly what a 2PL or a 3PL is and what they do, so how often do you hear about 4PL’s.
Todays repost is fro Ronald D. Southard, CEO at SafeSourcing Inc. in 2014 and still relevant today.
4PL’s or fourth generation logistics providers are the newest (although not that new) of logistics providers and typically they are a consulting firm that brings together the resources of other providers such as 2PL’s and 3PL’s to drive world class logistics performance. This might include global or local companies that are focused on air transportation; ground transportation as well as ocean bound freight. The goal of these organizations is to piece together solutions rather than to develop or own them. Without assets, 4PL’s can change quickly as performance and demand dictates.
With a good 4PL in place companies typically are not bound by their traditional marketing areas and can create new demand in areas they may have never conducted business in before. This is referred to as Blue Ocean Strategy.
According to Wikipedia, Blue Ocean Strategy is a business strategy book first published in 2005 and written by W. Chan Kim and Renée Mauborgne of The Blue Ocean Strategy Institute at INSEAD. The book illustrates what the authors believe is the high growth and profits an organization can generate by creating new demand in an uncontested market space, or a “Blue Ocean”.
How are you managing your logistics requirements? If you’d like some guidance before you just jump in and get overwhelmed, please contact a SafeSourcing Customer Services Account Manager.
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