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30.07.2015
In 1996, Accenture first coined the term 4PL (Fourth Party Logistics Provider) and defined it as a 'Supply chain integrator that assembles and manages the resources, capabilities, and technology of its own organisation with those of complementary service providers to deliver a comprehensive supply chain solution'.
Despite still being in its infancy, 4PL holds a massive potential and it will grow over the next few years. On one hand, there are several factors, which are acting as the driving force behind this market.
This is why Frost & Sullivan believes that 4PLs have to be extremely flexible in coming forward to meet their customers' requirements as it is the scope of the engagement with them which will determine how the two parties will work together. In general, the 4PL concept very much focuses on working together with client on transformation efficiencies, thus redesigning not only the supply chain but sometimes also the overall business process and internal organisation. In addition, due to upcoming European legislation and environmental pressures, companies are being encouraged to improve asset utilisation and efficiency and a successful 4PL model can result in better operational efficiency and process enhancements.
On the other hand, one of the biggest challenges of the 4PL concept is based around its very definition, as the level of understanding of how this entity works still varies amongst suppliers and customers.
In particular, 4PL providers will have to convince customers of the real added value that this type of engagement can bring, as the perceived cost will be higher. 4PLs need to work very closely with the customer from day one-even before the bidding stage- in order to gain their trust and help them in the transition to the 4PL organisation. Also, due to a growing dissatisfaction with the 3PL services, suppliers have to battle against the growing disloyalty of customers who may sometimes want to be able to switch from one 3PL provider to another if it means getting a better deal and a better price.
In general, entering a 4PL arrangement represents a long-term risk both for the supplier and the customer so a common vision, alignment of goals and excellent communication between the two parties are necessary from the start for the deal to bring real value. In conclusion, Frost & Sullivan believes that the Logistics Industry in Europe is being too cautious in its forecasts for the 4PL market. Frost & Sullivan is not, however, claiming that in the future 3PL providers are going to be replaced by 4PLs.
We believe that companies can no longer afford to ignore the rise of 4PL because it is undeniable that all the facets of the Logistics market will be significantly affected by this gradual parallel transition to a superprovider. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising.
Houston, which ranked tenth overall on the report’s first-ever “Ports and Logistics Index,” is projected to see an increase of new exports in the near future.
Even as the East Coast ports are gaining ground, the ports of Los Angeles and Long Beach still topped the Index thanks to infrastructure that is well-suited to handle the largest cargo container ships, proximity to Asian export markets, a strong local economy and a deep industrial real estate market. When it comes to port infrastructure alone—which measured total twenty-foot equivalent unit (TEU) volume, long-term growth in annual TEU volume and year-over-year growth in TEU volume—Los Angeles, New York and New Jersey, and Long Beach took the top spots, with Savannah and Virginia (Norfolk) at #4 and #5, respectively.
With respect to the real estate ranking component—which was weighted less heavily in the overall rankings than port infrastructure—the characteristics measured included a market’s total size, availability of existing industrial space, demand activity, historical and forecasted construction rates, rent growth and each market’s position in its own cycle.
Logistics is about moving materials, information and funds from one business to another business or from a business to the end user. According to the report “India Express Logistics Market Outlook, 2021”, India’s Express Industry has reached a market size of INR 20346 crore by 2015.


This report can be useful to Industry consultants and other stakeholders to align their market-centric strategies. The information contained in this report is based upon both primary and secondary research. Since then, there has been a lot of speculation as to how this concept could really be put into practice in its entirety and whether potential 4PL providers would ever live up to its original definition.
As a result, some people are starting to wonder whether we are making the same wrong assumptions we made about the potential success of 3PLs a little over two decades ago. The scope of the 4PL deal will also be the result of the respective capabilities of suppliers and shippers. Some actually regard it as a potential threat not only to their business but possibly to their jobs as well. At the same time, they will need to ensure that they can effectively deliver the promised value proposition across the model, thus implementing the 4PL fundamentals along the supply chain. This can represent a major challenge, as many customer segments have traditionally been more reluctant to delegate control of their supply chain, especially when the latter is core to their business.
This creates a major contradiction with the 4PL concept, which is fundamentally based on the establishment of a long-term strategic partnership and major internal transformations. Customers may not always see it like this so changing their perceptions of the market is a major challenge for 4PLs. Some people still claim that this is a very good theoretical concept, which is just not feasible in practical terms. On the contrary, they are pivotal to their success as the 4PL model is based on the Best-of Breed approach, thus selecting and incorporating partners, which will provide the best services and ultimately help the 4PL provider support their value proposition to shippers. With the Houston Ship Channel and southeastern Texas already seeing record traffic thanks to the ongoing shale boom and manufacturing surge, condensate exports and the growing debate over ending the crude export ban could lead to even more tankers cruising through the Houston region. The markets with healthy amounts of existing and planned space for their size, and which have experienced growth during the current recovery cycle but have not yet reached their peaks, rose to the top of the list.
The market of Express delivery has been on an increasing trend since 2012 as India started participating in the e-tailing business and with increased market penetration of automobiles.
In addition to marketing & presentations, it will also increase competitive knowledge about the industry. Primary research included interviews with express logistics industry people and channel partners in India.
A lot of emphasis was placed on the 4PL provider being a single point of contact for the shipper, whilst becoming an integrated part of their business to the point of representing their Logistics department. Back then, the idea of a 3PL was being discredited and many shippers were not prepared to outsource their logistics activities to a third party, even though these may not have been part of their core competencies. By recognising what is driving and restraining the market, companies can take full advantage of the strategic opportunities on offer. Their requirements have gradually become more and more demanding, thus expecting the best deal at the best price wherever they are based in the world.


It is actually in these instances that 4PL activities are dealt with from within the organisation, as the perceived value of using an external partner is lower.
But the reality is that similarly to the 3PL market, which has grown despite negative forecasts, the 4PL market will take off. In a tough environment, where 3PLs are struggling with their margins, 4PL is definitely not everybody's cup of tea. The transport industry in India is majorly formed by the road transport, rail transport, sea transport and air transport.
Compared to the overall logistics industry which is limping at a moderate CAGR of 3 percent, Express Industry is nimble in terms of growth in market size along with concomitant improvement in policies and infrastructure. But today, 3PLs are well established and consolidation of many providers is resulting in large players leading the market, thus having proved the predictions wrong. It is widely recognised that when shippers enter a logistics-outsourcing project, they essentially want one company and one point of contact to do it all coupled with supply chain visibility. A number of companies are already offering these types of services and an equal number are considering them as business options. This is because the move towards the 4PL model does involve not only entering a risk-reward scheme with the shipper but it also requires that the candidate has certain essential capabilities, namely extensive IT skills, management capabilities and branch specific know-how. Armstrong & Associates' online 3PL Guide Who’s Who in Logistics and Supply Chain Management and its 3PL market research are utilized globally by supply chain participants, analysts, and investors. The industry can be classified broadly based on the mode of transport it uses, surface having predominance. The report reveals that Gati, Safexpress, Blue Dart, TCI XPS and SpotOn are the leading players in Indian Express market and their revenue share is expected to grow over the forecasted period, owing to their expanding distribution network. Customers are asking for more strategic, solution driven and global answers to their requirements. As this concept becomes more of a market reality, companies will just not want-and will not be able to afford- to miss out on it. Express industry is a premium segment of the logistics industry, providing logistics services for movement of time perceptive shipments. By creating an integrated sequence including multi-modal transport modes, both air and surface, express industry has fine-tuned the logistics process for time-bound deliveries of shipments across domestic and international regions. However, it is expected that the blooming e-commerce market and relating 3PL and hyperlocal space will prompt the Express market in coming years.



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