A 3PL is a third party logistics provider that runs operational services like warehousing, pick pack, and transportation for part of your network under agreed SLAs.

A 4PL is a fourth party logistics orchestrator that designs the network, selects and manages multiple 3PLs and carriers, owns the playbook and tech integrations, and is accountable for end to end KPIs.

When should I move from 3PL to 4PL?

When you manage multiple 3PLs or carriers, sell across regions, need unified KPIs and cost to serve control, or require rapid lane changes without disrupting operations.

Who owns the data and tech stack in 3PL vs 4PL?

With a 3PL the WMS and transport tools are usually the provider’s. With a 4PL you get a control tower that integrates WMS, OMS, and TMS across partners so you retain visibility and decision rights.

How do KPIs differ between 3PL and 4PL models?

3PLs report on their slice — pick accuracy, dock to stock, on time dispatch. A 4PL rolls it up — OTIF, empty mile ratio, trailer utilisation, cost per order, and gCO2e per shipment by lane and site.

Is a 4PL more expensive than a 3PL?

Not necessarily. A 4PL can lower total cost to serve by optimising networks, balancing carriers, and improving utilisation — the orchestration fee is offset by savings and service gains.

How does Transport Works operate as a 4PL?

We design the network, orchestrate multi carrier and multi 3PL partners, integrate your stack, and run KPI dashboards with continuous improvement across NZ, AU, and the USA.

3PL vs. 4PL: What’s the Difference & Which One Do You Need?

Danyul Gleeson
Sep 10
3 min read

In the world of logistics, acronyms get thrown around like confetti, and 3PL vs. 4PL is one of the biggest battles in the supply chain arena. If you’ve ever wondered which one is right for your business - or if you’re just tired of pretending you know the difference - you’re in the right place.

Both Third-Party Logistics (3PL) and Fourth-Party Logistics (4PL) are outsourced logistics solutions that help businesses manage their supply chains, but they operate at different levels. One handles the heavy lifting (literally), while the other orchestrates the entire show from behind the scenes.

So, which one do you need? Let’s break it down.

A man in a suit and hard hat holds a laptop. Background shows a train, plane, and ship with a city skyline. Futuristic, dynamic feel.

What Is 3PL? (Third-Party Logistics) 🚛

A 3PL (Third-Party Logistics) provider is the middleman that physically moves and stores your products. Think of it as your warehouse and trucking department - but outsourced.

✔ Handles logistics operations, including warehousing, inventory management, and transportation.

✔ Provides order fulfillment (picking, packing, and shipping).

✔ Often owns physical assets like trucks, distribution centers, and warehouses.

✔ Works as a logistics service provider, but you still manage supply chain decisions.

💡 Example: You run an e-commerce business selling coffee machines. Instead of renting your own warehouse and hiring a logistics team, you use a 3PL provider to store your stock, process orders, and ship them to customers.

🔗 See how 3PL warehousing & fulfillment improves logistics.

What Is 4PL? (Fourth-Party Logistics) 🎯

A 4PL (Fourth-Party Logistics) provider is the logistics mastermind - the strategic partner that oversees and manages your entire supply chain. A 4PL doesn’t just store and transport goods - it coordinates everything, from working with multiple 3PLs to optimizing supply chain efficiency.

✔ Manages the entire supply chain on your behalf - including all 3PL providers.

✔ Focuses on strategy, optimization, and cost reduction rather than physical logistics.

✔ Doesn’t own physical assets - instead, they work with 3PLs and other service providers.

✔ Acts as a single point of contact for all logistics operations.

💡 Example: You’re a global retailer expanding into multiple countries. Instead of juggling different warehouses, shipping providers, and customs processes, you hire a 4PL provider to manage it all. They negotiate with 3PLs, oversee transportation networks, and optimize costs - so you don’t have to.

🔗 Learn how 4PL logistics improves efficiency & cost savings.

3PL vs. 4PL: Key Differences 🔍

Feature	3PL (Third-Party Logistics)	4PL (Fourth-Party Logistics)
Main Function	Provides logistics services (warehousing, shipping, fulfillment).	Manages & optimizes the entire supply chain.
Level of Involvement	Tactical: You still make supply chain decisions.	Strategic: Oversees all logistics operations on your behalf.
Owns Physical Assets?	Yes - warehouses, trucks, distribution centers.	No - partners with 3PLs & other logistics providers.
Best For	Businesses that need storage & shipping services but want to control operations.	Companies that want a fully outsourced logistics strategy.
Single Point of Contact?	No - you’ll still deal with multiple logistics providers.	Yes - the 4PL manages all logistics providers for you.

💡 Which One Do You Need?

✔ If you need help with warehousing, fulfillment, and transport - but still want control over your supply chain → Go with 3PL.

✔ If you want a fully managed logistics solution with a strategic approach → A 4PL is your best bet.

🔗 See how 3PL vs 4PL logistics services compare.

Final Thoughts:

3PL vs. 4PL - Which One Wins?

There’s no “one-size-fits-all” answer - it all depends on your business size, complexity, and logistics needs.

✔ Startups & growing businesses typically use 3PL services to outsource warehousing and fulfillment without losing control.

✔ Large enterprises & global brands often rely on 4PL providers to manage multiple 3PLs, optimize costs, and streamline logistics on a massive scale.

🚛 Need help choosing the right logistics solution for your business?

Insights from Danyul Gleeson, Founder & Chaos Tamer-in-Chief at Transport Works

Danyul has been in the trenches - warehouses where pick paths were sketched on pizza boxes and boardrooms where the “supply chain strategy” was a shrug. He built Transport Works to flip that script: a 4PL that turns broken systems into competitive advantage. His mission? Always Delivering - without the chaos.