The term 3PL is commonly known and understood in our industry but many may not know the differences between 3PL and 4PL.
Blue Ribbon Transport provides 3PL and 4PL services for those customers who want to outsource their logistics processes so let us explain the differences.
What is a 3PL?
“Third-party logistics” companies specialize in transporting, warehousing and scheduling the delivery of goods owned by others.
A customer who prefers flexibility and would like to maintain control over the transportation processes would most likely choose to work with a 3PL provider. The customer manages their own logistics providers and there are no contracts requiring he/she to work with any certain providers.
The 3PL provider takes physical possession of goods to be delivered, arranges the appropriate delivery method or mode of transportation, arranges schedules and handles all operational tasks associated with the delivery process. These services may be provided on a one-time or ongoing basis.
What is a 4PL?
If a customer is looking for a “hands-off” approach to logistics and would prefer someone to coordinate the entire process from start to finish, he/she would most likely choose to contract with a 4PL provider.
A 4PL manages a network of 3PLs on behalf of their customer (the shipper), in addition to providing the technology needed by the customer. If working with Blue Ribbon Transport, the customer still holds the contract with the carrier (including potentially with BRT as well) but uses BRT to tender freight, provide TMS and audit/pay the carrier. The customer chooses the carriers and negotiates pricing (with BRT’s help) and provides BRT with a routing guide to load in TMS that tenders based on customer’s selected carriers. Typically customers pay for this service in a per shipment fee.
What Makes BRT Unique as a 4PL provider?
What makes BRT unique versus other 4PL providers is our approach. Highly relationship based, transparent and customized, we approach 4PL design based on what the customer needs vs. us telling them our rules and making them fit the rules. Also unique is that we can provide not just for traditional Over the Road asset players and 3PL’s, but we also can provide for private fleets for customers that don’t want to put the time, people and resources into running the fleets.
All of this is coordinated in MercuryGate TMS with Mojo Software providing optimization.
To learn more about how Blue Ribbon Transport can help you and your business’ logistics needs, Contact Us.