Fourth-Party Logistics (4PL) Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Fourth-Party Logistics (4PL) Category Overview

The 4PL category is anticipated to grow at a CAGR of 6.9% from 2023 to 2030. North America accounts for the largest share. Factors such as the increasing growth in online shopping and the e-commerce sector, the rising need for efficient warehouse management systems, automated order fulfillment, inventory and returns management systems, and enhanced post-purchase and payment systems are driving the growth of this category. One of the key trends is the increasing use of robotic picking arms and vision systems in large warehouses to reduce errors and boost productivity.

For example, many 4PL companies are using robots to pick and pack orders, while Automated Guided Vehicles (AGVs) are being used to move goods around warehouses and large distribution centers. Collaborative robots (cobots) are used for lifting heavy-duty operations and repetitive tasks. Many cobots are also equipped with IoT sensors that can monitor the health, blood pressure, and temperature of warehouse workers. In the technology space, cyber 4PL is the latest emerging trend. Cyber 4PLs are specialist logistics providers that offer multiple systems integration, adaptive digital platforms, and advanced analytics in addition to supply chain consultancy solutions. Their intellectual property is the mix of assets with software algorithms that they can deploy across the supply chain to effectively generate critical insights.

Companies generally adopt a cost-plus or a gain-share model pricing while engaging with 4PL service providers. The cost-plus model is a pricing strategy where the 4PL service provider charges the client for the actual costs incurred in managing the logistics operations, along with an additional markup or fee. On the other hand, the gain-sharing model is a collaborative pricing approach where the 4PL and the client share the benefits or savings achieved through improved supply chain performance or cost reductions. The choice between the models depends on specific requirements and preferences.

In the European region, in 2022, road transportation prices have increased by 10 - 15% due to soaring fuel costs, high inflation, the global supply chain crisis, and a tight supply of goods. Since 2021, fuel prices have increased significantly in Germany, Italy, the U.K., and France which have in turn impacted transportation and 4PL service costs. For instance, in Germany, diesel prices in Q3 2021 increased by 38% compared to 2020. Similarly, during the same period, diesel prices in France, Italy, and the U.K. increased by 23.5%, 20.6%, and 26.6% respectively. Road transport prices are also getting impacted by truck shortages and labor shortages amid very high demand for trucking services. For instance, in Spain, there is a shortage of 10,000 and 15,000 professional drivers in Spain. In France, there is a shortage of between 40,000 - 50,000 drivers and Germany lacks 65,000 drivers. 

4PL Category Procurement Intelligence Report Scope