What is Fourth Party (4 PL) Logistics? A Simple Introduction
Logistics can be defined as the management of acquiring, storing, and transporting of resources to its final destination. Fourth party logistics is the most innovative form of outsourcing and has rapidly been gaining popularity since past few years. The fourth party logistics also has a lot to offer in the management of inbound raw material supply, dynamic logistics, demand driven logistics, and global orchestrator.Major functions of #fourth #party #logistics include procurement, storage and distribution. In addition, improved customer services, reduction in overall operating cost, and more flexibility are some of the advantages of fourth party logistics.
The need of an economic and effective management system, which has benefits of both in and outsourcing majorly drives the market growth. In addition, increase in complexities in operation process and rise in demand for customized solutions also boosts the market. However, reluctance of companies to outsource the logistics function hinders the growth of the market. Most of the companies just refuse to embrace this concept because of the fear, they will not have full control over supply chain.
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The 5PL model tends to meet the needs of future logistics companies and has significant impact on the development of # Internet #of #things (IoT). The #5PL online payment function simplifies the transaction & the convenience for the customer to respond directly regarding the quality of the service. Market innovators like Amazon, Walmart, Uber, Airbnb, and AWS have ushered the “On-demand economy” by offering extremely high-level services such as “24-hr delivery”, “1-hr delivery”, and “on-demand server space” while maintaining complete visibility of the process among the customer. Therefore, customer satisfaction is the touch-point between a company & its customer.
The COVID-19 outbreak had a significant impact on the logistics industry. Temporary production halts caused economic crises throughout the industrial supply chain due to lockdowns, night curfews, & flight cancellations. The logistics market has faced increased uncertainty due to a lack of manufacturing confidence and reduced demand for raw materials & commodities.
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