As global supply chains face significant uncertainties in 2025 due to ongoing geopolitical disruptions and evolving trade policies, more and more companies are looking to one-stop-shop solutions, such as fourth-party logistics providers (4PLs).
The 4PL market has grown 10% over the past two years and is expected to have a compound annual growth rate of 8.39% to reach $104.54 billion by the end of 2030, according to a study by Verified Market Reports.
“There is more disruption. There is more fluidity in the design of global networks,” David Gonzalez, vice president of the logistics, customer satisfaction and network design team at Gartner, told FreightWaves in an interview.
Technology research and consulting firm Gartner recently released its 2024 “Market Guide for Fourth-Party Logistics,” which discusses the value that 4PLs deliver in an ever-changing global logistics network.
“Companies are choosing to make products in different locations, which results in different freight flows from different countries, increasing the complexity, but also the flexibility that companies want to maintain in how they deploy their global supply chain networks. I think these two are the main reasons why we have seen an increase in demand for 4PLs,” said Gonzalez.
While 3PLs can help a company execute its logistics strategy, 4PLs help companies with strategy, orchestration and management of an entire supply chain, Gonzalez said.
“The biggest difference is that a 4PL doesn’t necessarily have to perform the service themselves,” Gonzalez told FreightWaves in an interview. “A 4PL is about managing the day-to-day transactions and the day-to-day components of a logistics service, either through the infrastructure provided by subcontractors or by managing other organizations and being able to combine all those individual services into one. end-to-end process.”
Gonzalez said companies in the automotive supply chain were among the early adopters of 4PL services.
“There’s been investment in 4PL in the automotive industry for a while now, and I think they’re probably one of the first to support this kind of service, whereas I think it was first created in the late 1960s, early 1970s when 4PLs actually started working. within our industry it’s becoming a little bit clear,” Gonzalez said.
Other industries increasingly seeking 4PL services include pharmaceuticals, energy and consumer products.
“Interestingly, we don’t necessarily see significant growth in the retail sector towards 4PLs among retailers, but we don’t think their global supply chains are really any less complex than those of other vertical industries,” Gonzalez said. “I think retailers have been investing in logistics for a long time, so they’ve created this capability almost internally, rather than having to source it from an outside company.”
The largest providers of 4PL services in 2024 will include companies such as Maersk, DHL, Redwood Logistics, Bridgenet Solutions, CH Robinson, DSV and Kuehne + Nagel.
“These companies see 4PL as a value-added component to the service they want to provide to their customers,” Gonzalez said. “The difference between them and a company that doesn’t own infrastructure is the ownership of the infrastructure. You can imagine that a company like DHL can make as much use of its own infrastructure as it can manage the infrastructure of others.”
According to the Gartner report, 4PLs should operate from a neutral approach, driven by customer value, rather than the 4PLs’ own vested interests, such as existing network or resource locations and infrastructure.
“Shippers will have different opinions on the level of neutrality they want, but I would say that even if shippers don’t place a huge amount of value on the need to be neutral, they will always have an element of neutrality incorporated into their 4PL. selection processes, whether it is very influential or not particularly influential,” Gonzalez said.
4PL contracts are typically multi-year and cost millions of dollars.
“I would say that on average, 4PL contracts would probably be closer to five years rather than something less,” Gonzalez said. “You would imagine that they need that longevity to be able to deliver some of the value that they are committed to.”
Shippers working with a 4PL should be comfortable with “the idea of a highly outsourced relationship,” says Gonzalez. “What we always advise customers is: look at the technological benefits you get from the 4PL. If the 4PL just suggests that they are going to replace your people with their own people, that does not make for a good 4PL. This is about being more productive, efficient and integrated, and that requires a strong technology foundation from the 4PL.”
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