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3PL vs. 4PL vs. 5PL- Here’s the Difference

3PL vs. 4PL vs. 5PL- Here’s the Difference

The COVID-19 pandemic has disrupted supply chains globally, but has had a disproportionate impact on food and beverage supply chains. Overnight, demand from commercial and industrial food markets effectively disappeared due to shelter-in-place orders. At the same time, food and beverage companies were overwhelmed, adjusting to increased demand in ecommerce orders business and the urgent need to replenish retail shelves. Four months into this pandemic, a growing number of food and beverage producers are searching for logistics partners who can build resiliency into their supply chains and adapt their operations to meet the increase in ecommerce. As these companies seek strategic partners to help their supply chains withstand a global pandemic, many are struggling to decipher the difference between a 3PL, 4PL, and 5PL.

In this article in Food Logistics, David Commiskey, Vice President of Customer Solutions at GlobalTranz, joins industry experts to share insights into how 3PLs and 4PLs can support shippers dealing with the impact of COVID-19, and the role technology plays in these strategic partnerships.

“3PLs and 4PLs both enable shippers to focus on their core competencies by managing supply chain and logistics needs,” commented David Commiskey. “A common misconception is that 3PLs are brokers and while the two are similar, they’re not interchangeable. 3PLs act as a strategic partner for shippers as they move goods across the country and have skin in the game because they’re taking on pricing and risk commitments with each load. 4PLs manage a company’s entire supply chain, also taking on that consultative role while managing other logistics providers.”

While the pandemic has forced shippers to change their supply chain operations and reassess partnerships, logistic companies are advancing technology, automation, and analytics to support shippers’ new supply chain needs.

Commiskey added, “Robotic process automation (RPA) has made it possible for 3PLs and 4PLs to regularly pull critical industry information and statistics, which has become increasingly critical during the pandemic, to share real-time updates with customers and inform strategy. Tech-enabled 3PLs and 4PLs are building these features into their TMS. All of these technologies have made it possible for food shippers to not only have visibility into every detail of their supply chain, but to also mine data that can optimize their networks and strategy into the future. As the country collectively seeks to return to this new normal, leveraging data-on-hand and staying on top of new insights can make or break the success of a company’s supply chain strategy.”

To ensure your supply chain can withstand disruption and thrive even amidst a crisis as significant as a global pandemic, a strategic partnership with a 3PL or 4PL is critical. “They are able to provide nimble solutions that align with business goals. It’s important to consider factors like scale and technology when choosing a partner, but logistics remains a relationship-driven business- without the right relationships with carriers and other industry stakeholders, logistics leaders won’t see the results they’re seeking,” said Commiskey.

To read the full article, please click here.

To request a supply chain consultation with GlobalTranz’s expert Supply Chain Solutions team, please click here.