“The question no longer is whether to outsource, but what and how much to outsource”.
Gartner Logistics Outsourcing Strategy Survey
Outsourcing supply chain services is mainstream. Today, logistics leaders must accurately assess what and how much to outsource. There are many legitimate and valid reasons to make the strategic decision to work with a 4PL partner or considering changing the existing model from a 3PL to a 4PL supply chain model.
Outsourcing to a single partner, a 4PL, can be incredibly advantageous for organizations because the relationship frees up resources to focus on their core business and activities. We manage a network of supply chain carriers, vendors, brokers, and haulers on your behalf.
Below you will find a number of considerations that may or may not yet apply to your organization currently. We recommend that you go through them in detail. If you would like to discuss this with us, please feel free to contact us. We will be delighted to help you out.
Often customers conclude that their shipping volume might be at a size where buying directly from carriers can become as or even more cost-efficient as relying on a 3PL forwarder. Reducing the transportation cost by not paying the 3PL margin on freight costs as volumes helps to achieve optimized pricing by contracting directly with carriers.
Taking own control
A 4PL solution offers your business the opportunity to take control over your own carrier purchasing and renew and/or change carrier contracts as often as you want. A single, stable 4PL provider becomes “your organizations single source of truth” for contract execution and end-to-end supply chain visibility.
Cost of Change
When changing carrier awards, a 4PL manages the switch to using new carriers, while the operational relationship remains unchanged. Apart from tender-related costs, there is little to no cost of change for the organization. Also, customer service impacts usually experienced when changing 3PL service providers are eliminated.
Supply Chain Optimization
Building on long-term relationships, the 4PL so that more knowledge is gained by the 4PL on your supply chain. With longer-term 4PL contracts in place including gainsharing opportunities, the 4PL is incentivized to work on supply chain cost optimization projects.
Governance and International Trade Expertise
Governance and International Trade Expertise is based on long term contracts, you are able to outsource a number of logistics and international trade functions to the 4PL to set up, manage and optimize your trade lanes both from a logistics and trade perspective.
Using your 4PL to connect with all parties in the your supply chain, validate and complete data collected from these parties a single source of truth is established and creating real end-to-end visibility in a single platform.
Through automated visibility and workflow management solutions in combination with experienced customer service teams, end to end visibility is provided to you with a focus on exceptions that need to be acted on, whilst the 4PL works actively to optimize the performance of the carriers selected by your organization.
Allow your organization to focus on business growth and your core mission whilst depending on your organization 4PL to manage the logistics supply chain.
Final Take Away
Outsourcing to a single partner, a 4PL, can be incredibly advantageous because the relationship allows you as an organizations to focus on your core business and product. We manage your network of supply chain carriers, vendors, brokers, and haulers on your behalf.