What are fourth party logistics consultants

A fourth-party logistics consultant provider is an independent and accountable, non-asset based manager of a client's supply and demand chains

Fourth party logistics consultants providers

Nowadays advisors, logistics consultants, software companies and even third party logistics consultant providers say that they are in fact 4PL. This is because any company advising a customer on logistics, transportation, and supply chain matters feels genuinely that that may in fact be the case. In fact this is only the case only when the principle of neutrality is respected, and that any conflict of interest is avoided.

A fourth-party logistics provider must also offer services that look at all aspects considering a 360 degree view, which is not focused on its ability to implement the recommendations it gives, but on all the options available in the market.

Principle of neutrality for logistics consultants

As such an IT consulting firm specialized in WMS (Warehouse Management Systems), which is objectively considering all the various WMS present in the market is a 4PL. It may obviously not represent any WMS brand or any software company, otherwise the concept of neutrality is broken, and it leads to conflict of interest.

Similarly a non-asset based consulting firm specialized in logistics, transportation, and supply chain management may claim it is a 4PL. This is effectively the case if it does not own warehouses, logistics platforms[disambiguation needed], vans, trucks, ships, barges, planes, a freight forwarder, or a courier company, otherwise it would lead to conflict of interest.

It has been sometimes argued that a fourth party logistics consultant provider is the same thing as a "non-asset based 3PL". This is not the case. Considering that probably 90% of the world's 3PL are "non-asset based", they nevertheless generate revenues & profits from their "non-asset based" activities. As such a 3PL cannot be a 4PL in the same time, as this would lead to conflict of interest. Indeed it would then have a tendency to recommend to customers its "non-asset based" operation as the best possible option.

There are several companies including Gideon Hillman Consulting that supply expert logistics consulting expertise who have access to widely trained logistics consultants and other aspects of the logistics industry.

Published on 14/01/2011

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