What Exactly Is a Modern 4PL — and Why Should You Partner with One?

You’ve probably noticed that Redwood Logistics brands itself as a “modern 4PL.” But what exactly does that mean? And what real-world benefits does it deliver for our customers? 

First, it’s worth noting that there are two distinct aspects of every shipper’s supply chain. The physical supply chain — or the execution component — is composed of product inventories, warehouses, trucking fleets, equipment and employees. It also includes external partners like carriers, freight brokers, freight forwarders, and managed services providers. 

In recent years, the second aspect — the digital supply chain — has emerged as equally important. Advanced technology has dramatically improved the ability of shippers to optimize their physical assets. Transportation management systems, warehouse management systems, order management systems, tracking and reporting tools, and other digital solutions enable shippers to move products more efficiently, accurately and cost-effectively. 

Third-party logistics providers, or 3PLs, are good at managing physical assets and installing single technology solutions like a new TMS. They typically focus on cost reductions and improved efficiencies in a narrow functional area, like warehousing, procurement or fleet management. For example, 3PLs excel at digitally routing trucks or booking capacity via a digital marketplace. 

The problem with the narrow, functional approach applied by most 3PLs? Shippers often find themselves facing a “digital divide.” While they may have best-in-class systems in certain functional areas, they lack an overall, connected, strategic technology infrastructure. They typically have singular integrations with multiple warehousing partners' WMS instance, dozens of carriers for EDI/API, tracking partners for status updates, and compliance modules for safety. This creates a complex web of disconnected systems that are difficult to manage and can lead to inefficiencies and errors. 

Shippers find themselves with disconnected, disparate systems and multiple data sources that support those solutions. They lack integration, shared priorities, a central data repository and a single version of the truth. Their physical and digital assets are not orchestrated, synchronized and tightly connected in real time. Functional gains achieved in one area — like on-time, in-full deliveries — may create issues in other areas, like inventory optimization. 

This is not a minor issue or an inconvenience. It’s a key reason why 83% of supply chain executives report that their advanced technology hasn’t fully delivered on its potential. 

You’ve Made Technology Investments — Now Maximize Them

That’s where a modern 4PL comes in. With its unique combination of hands-on execution experience and its mastery of supply chain digitalization, Redwood revolutionizes the integration of logistics and technology. It seamlessly blends the right physical and digital solutions for each customer’s business to create an open, connected and collaborative supply chain ecosystem — in which all assets, systems and processes are aligned on the same objectives and fed by the same data.  

In a world where 50% of large shippers cite integration complexity as the largest obstacle in implementing new technology, Redwood has developed proprietary methods and solutions — including its RedwoodConnect™ platform — to directly address this challenge. By partnering with Redwood to create a connected digital ecosystem, logistics teams can gain real-time visibility, greater control, improved agility, faster responsiveness to disruptions, and enhanced collaboration with upstream and downstream partners. 

While 3PLs often follow a prescribed approach with every customer, a modern 4PL like Redwood enables complete flexibility. Redwood’s broad portfolio of capabilities, and its extensive partner network, allow you to mix and match providers, technologies and services — for a customized logistics solution as unique as your supply chain fingerprint. 

The practical benefits include cost reductions, increased service levels, speed and efficiency improvements, and reduced resource demands. But you’ll also be able to see disruptions and changing conditions immediately across your supply chain, your partner network and your key markets. In response, you can make fact-based, data-driven decisions that optimize multiple outcomes — and have a high probability of success. You’ll be able to get new digital capabilities up and running quickly, as well as maximize their long-term contributions. 

It all adds up to a significant advantage in today’s fast-paced, volatile and hypercompetitive logistics environment. Don’t believe us? Find out how to connect the pieces in our infographic and learn more about the value our Modern 4PL approach creates everyday. 

For more than two decades, Redwood has been helping customers maximize the performance of both their physical and digital assets. Discover the results Redwood can deliver for your business by scheduling a free, no-obligation supply chain assessment today.