What is Fourth Party Logistics?

In essence, a Fourth Party Logistics provider is a supply chain integrator that assembles and manages the resource, capabilities and technology of its own organisation with those of complimentary service providers to deliver a comprehensive supply chain solution.

As conceptually illustrated and examined in the book, Strategic Supply Chain Alignment by John Gattorna, supply chain evolution has occurred, with organisation moving from insourcing to outsourcing to 4PL arrangements.

According to Gattorna, “While outsourcing third-party logistics is now accepted business practice, Fourth Party Logistics is emerging as a breakthrough solution to modern supply chain challengers…to provide maximum overall benefit”.

Central to the 4PL’s success it the best of breed approach to providing services to a client. The development of fourth partly solutions leverage the capabilities of 3PL’s, technology service providers and business process managers to provide the client organisation with greater cross functional integration and broader operational autonomy.

Two key distinctions make the concept of 4PL unique and set it apart from other outsourcing options available to the market today. First a 4PL delivers a comprehensive supply chain solution and second it delivers value through the ability to affect the entire supply chain.