The Value of a 4PL: The Proof Is in the Execution

At its heart, logistics is about moving products. But execution approaches — and the results they generate — vary widely. In Redwood’s recently published book, Modern 4PL for Dummies, author Eric Rempel describes the unique advantage shippers can achieve by partnering with a modern fourth-party logistics provider, or 4PL, to optimize day-to-day logistics execution for cost, service, accuracy, sustainability, and other criteria.   

Rempel, who’s the Chief Innovation Officer at Redwood, explains that 4PLs excel not just at tactical execution — getting products to the right place at the right time — but also at top-level logistics strategy. “A Modern 4PL can provide ‘one off’ services like ad hoc transportation, managed transportation, and managed warehousing,” he notes. “And they do that very well, based on their deep experience, comprehensive resources, expansive partner networks, and volume buying advantages over smaller logistics providers.” 

“But 4PLs add their greatest value when it comes to strategically optimizing every activity associated with execution,” Rempel continues.

“Modern 4PLs go beyond mere physical execution — to help shippers get the biggest possible return on all their people, processes, and technology. As they provide managed logistics services, Modern 4PLs ask tough strategic questions like, ‘Does the foundational network model make sense?’ and ‘Are we truly maximizing the return on all our capital investments?’ 

Three Ways Modern 4PLs Excel at Execution 

In the second chapter of Modern 4PL for Dummies, Rempel describes how Modern 4PLs like Redwood add significant strategic value in three keyways as they tackle execution:  

• Process optimization. Based on their hands-on experience across hundreds of customers, Modern 4PLs are experts at making sure daily processes are optimized for speed, accuracy, visibility, and responsiveness. 4PLs can match the physical resources associated with execution with an advanced digital footprint that maximizes the performance of those resources — from inventory and trucks to labor and warehouse space. 4PLs are familiar with industry-specific best logistics practices, as well as advanced solutions like transportation management systems (TMS), warehouse management systems (WMS), and order management systems (OMS). Shippers can see key execution metrics in real time, including asset utilization, carrier performance, on-time in-full (OTIF) delivery rates, adherence to SLAs, and emissions. Modern execution is complex, but 4PLs know how to optimize it via leading-edge technology and proven best practices.  

• Workflow automation. Advanced technology, data, and decision science are also critical in enabling 4PLs to automate standard execution workflows. By digitalizing key functions with a TMS or WMS, connecting these solutions in real time, and feeding them accurate, real-time data, 4PLs can streamline and automate daily execution. Not only does process automation save time and manual resources, but it also eliminates human errors and increases execution speed. The automation services provided by 4PLs include robotics, but also decision automation. 4PLs can set targets and decision guardrails that are defined on a shipper-specific basis. When the unexpected happens, digital solutions deliver a fast, automated response that’s guided by advanced intelligence and business strategy, not faulty human judgment. Let’s say a critical shipment is delayed at sea because of port congestion. Today’s advanced TMS solutions can autonomously explore a range of resolutions — re-routing the ship to a different port, expediting an air shipment instead, or finding another source of supply. 4PLs leverage technology to plan and re-plan dynamically, automatically, and in real time, to strategically optimize outcomes.  

• World-class managed transportation and procurement. In providing managed logistics and brokerage services, 4PLs have vast resources to choose from. For example, when providing procurement, Redwood has 435,000 pieces of equipment and 34,000 carriers available, with a response time that’s less than two minutes. Those resources and relationships translate into not only lower costs and greater speed, but also more strategic, flexible decision making. 4PLs aren’t constrained by one mode, one route, one rate, or one carrier. Ever. That flexibility and bench strength positions 4PLs to make the best decisions and deliver a customized approach to every customer.  

Discover the Proven Value of a Modern 4PL  

There’s no question 4PLs excel at execution, overseeing both tactical and strategic components with equal ease. Their value of the Modern 4PL model is proven. As just one example, Redwood delivers an average cost savings of 15% to its managed transportation customers.  

How can shippers discover the value of 4PL for themselves? In Modern 4PL for Dummies, Rempel suggests starting with a that focuses on four phases: Discovery, design, delivery, and deployment.  

Any qualified and capable 4PL should be able to walk potential customers through this value-definition process with no obligation. The 4PL should begin by assessing the opportunity, including targeted areas for improvement, then develop a detailed roadmap for capturing that opportunity. In the delivery phase, the 4PL sets up and integrates digital solutions that connect the physical supply chain in real time. Finally, the deployment stage is where new solutions are launched, processes are optimized and automated, and value realization begins.    

If you’re looking to partner with a Modern 4PL for best-in-class execution, look to Redwood. A leader in the 4PL industry segment — recognized as a Representative Vendor for two straight years in Gartner’s 2024 Market Guide for 4PLs — Redwood has helped hundreds of companies optimize their execution results. Whether your goal is cost reduction, increased service levels, improved sustainability, or all the above, Redwood can get you there. 

Learn more by downloading a free copy of Modern 4PL For Dummies — or contact us for a one-on-one discussion of your unique execution challenges and objectives. 

As we dive into Modern 4PL For Dummies, our LinkedIn Live series will feature industry experts breaking down each chapter. Want to learn more? Download your free copy of Modern 4PL For Dummies — or watch Redwood’s recent LinkedIn Live event for a sneak peak of what’s in the book. 

We’ve got a LinkedIn Live session coming up — don’t miss it! Check out the full schedule to see what’s ahead and follow us on LinkedIn to join the conversation live!