Fourth-party logistics, also known as 4PL, is an operational model in which a business outsources its entire supply chain management and logistics to one external service provider. This partner oversees the supply chain, including the evaluation, design, construction, implementation, and measurement of the client's solutions.
You may be asking what’s the difference between 3PL and 4PL? Well… 3PL providers often own many or all the necessary assets you need to run your supply chain including trucks, distribution centers, and warehouses. While 4PLs are normally non-asset based—they may own IT systems and intellectual capital, but mainly provide logistics expertise. For example, a 4PL may manage the communication with the farmer to produce more eggs as the grocery store's inventory decreases.
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