• Mo Asady

What is a 4PL? And how can it transform your supply chain

Many companies choose to partner with multiple 3PLs to satisfy a need within their supply chain. 3PLs are usually outsourced to offer services within warehousing, distribution or fulfillment services.

Yet, it is the customer's function to micro manage the daily interactions with 3PLs and continuously define the scope of these relationships. It is also common for customers to partner with multiple 3PLs within the same business area in order to get multiple quotes on a project to ensure competitive pricing.

Many customers, who do not have a dedicated logistics team, lack the industry knowledge and the resources to manage these relationships. in result falling back to basic email and phone interactions which are both inefficient and time consuming.

At Freighton we meet with logistics directors and supply chain managers across multiple industries every week. A common trend we are noticing is that these individuals are overworked and spend a good portion of their time on the phone micro-managing individual customer orders and shipments.

Also many of these smaller(even sometimes larger) 3PLs lack the technology offering integrations to the customer's in-house system which are meant to reduce the time needed to communicate data between the two entities, resulting in more unnecessary phone calls and emails.

You already posses half of the solution

Mostly unaware, customers already hold half the solution. Your data, all these customer orders, BOLs, and transaction history both with your customers and vendors/3PLs are half the solution. Having the know-how to correctly analyze that data will result in qualified suggestions on how to improve your supply chain, which areas need immediate attention and what steps should be taken to fine tune it.

When analyzing data collected by a shipper over a number of years, we look first for the obvious patterns that are easily identifiable by the human eye. Amongst others we look into cost per mile, cost per pound, storage cost per square foot, the cost for temporary storage and company owned warehouses.

We also look at the time needed to convert a customer order to a freight tender and the lifecycle of a tender until it is picked up.

Secondly, Freighton uses advanced machine learning and AI to find relationships by cross referencing your data with external datasets for example weather, stock prices, overall economy indexes, interest rates, per mile freight costs and driver availability in certain regions. Only then are we able to suggest a qualified recommendation to improve your supply chain.

What is a 4PL?

a 4PL is a partner, not a supplier. it is an organization that manages your entire supply chain. consultants will attend your planning meetings and will make qualified decisions to manage your supply chain according to your budget.

Unlike a 3PL, a 4PL carries liability and accountability.

When Freighton is contracted as a 4PL we usually bring the following to the table:

  • Software A 4PL is responsible for providing the appropriate software to simplify your supply chain. We also build the needed integrations with any in-house system(s).

  • People We offer you a team of supply chain experts at your disposal with a single point of contact.

  • Pre-negotiated rates We have negotiated rates based on our overall volume to be able to offer you the best pricing in the industry.

  • Warehousing We partner and self-manage a number of warehouses around the nation offering you long and short term storage, cross docking, pick and pack, and final mile deliveries.

  • Transparency Our pricing model is completely transparent. You will always know what it costs us to offer a service, and how much our margins are.

Asset-less is an advantage

Many shippers indicate, upon first contact, that they only work asset based providers.

Freighton is an asset-less 4PL. We choose to work with the 90%(smaller carriers and owner operators) of the trucking industry rather than the 10% (asset based).

There is always a risk involved when working with smaller carriers. In order to make sure we are working with the right carriers we daily, five times a day in fact, evaluate the following performance metrics:

  • Driving history

  • On time pickup and deliveries

  • Insurance status

  • Maintenance records

  • Dispatch performance and communication

  • Customer feedback

It is not a secret, that dealing with smaller carriers comes with a major cost saving especially when a 4PL is able to cut out the middlemen. With less mouths to feed (brokers and dispatchers), a small carrier is able to provide better pricing while still earning more. Freighton partners directly with 50,000 carriers nation wide which translate to over 1 Million trucks. We can offer instant capacity which many of the asset based carriers lack.

Free consultation

contact us today to learn more about what Freighton can do to help you optimize your supply chain and save you money.

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