Fourth-party logistics providers (4PLs) offer higher levels of accountability and control than other logistics service providers, driven by the collection of massive amounts of relevant data and using technologies like the Internet of Things.
Those are some of the observations made in a newly published Technavio report on category spending within the global 4PL market, which includes a particular focus on procurement.
“4PL service providers analyse a firm’s requirements before offering strategic and cost-saving alternatives to ensure optimal performance and smooth functioning of the supply chain,” it states.
“The use of IoT and Big Data analytics helps buyers to predict what-if scenarios, analyse, and conduct demand forecasting.”
4PL service providers help optimise resources and maximise efficiency, estimate supply and demand, and assist in capacity planning; they can negotiate with multiple vendors for the best deal and minimise storage and inventory costs.
The report suggests that, compared with other LSPs, 4PLs offer more control and greater accountability, with specialised logistics management underpinned by sophisticated IT capabilities.
“4PL providers offer an end-to-end solution for transport fulfilment solutions, from inbound supply to aftermarket distribution,” the report adds.
“They help in designing optimal transport solutions that will maximise fleet efficiency and reduce delivery time.”