UK 3PL Adapts to Meet Growing Demand for Fourth-Party Logistics Services

The rising demand for 4PL services is putting pressure on eCommerce 3PL providers to offer value-added services traditionally associated with 4PLs. UK-based eCommerce fulfilment provider, Zendbox, is responding by combining the transparency and control of a 3PL with the strategic insights typically offered by a 4PL.

While 4PL services are usually reserved for large global brands, Zendbox’s 3PL offerings provide mid-sized retailers with access to enterprise-level strategic account management, advanced inventory analytics technology, and an industry-leading 10pm order cut-off time.

James Khoury, founder and CEO of Zendbox, commented: “As a 3PL, Zendbox focuses on specific operational functions, whereas 4PLs typically oversee the entire supply chain, from raw materials to orchestrating multiple fulfilment centres globally. 3PLs typically own their own warehousing infrastructure and technology, whereas 4PLs do not, and instead rely on their relationships with 3PL providers, manufacturers and suppliers.”

“Operationally, Zendbox handles everything from receiving inventory, picking and packing, order processing, shipping, returns management, reporting and analytics. 4PLs, on the other hand, begin with developing a strategy for their client, presenting a selection of candidate fulfilment services, then coordinating the implementation of providers, and in the medium to long-term, optimizing the supply chain, identifying bottlenecks and gaps in customer service quality. At Zendbox, we are proud to offer many of these benefits that are normally exclusive to 4PLs, making them accessible to mid-market retailers who ship anywhere from 30 to thousands of orders per day.”

“Both 3PLs and 4PLs require ongoing performance management, with periodical review meetings to monitor KPI and OKR metrics, and Zendbox is no exception. Our goals with clients are to minimise overheads, enhance the customer experience, make more profitable business decisions, expand into new markets, and drive continuous improvement.”

Background on 4PL Sector Growth

A 2022 report highlighted that the 4PL market was valued at $59.5 billion in 2022 and is projected to grow to $114 billion by 2032, with a compound annual growth rate (CAGR) of 7.5% during the forecast period. The increasing complexity of supply chains and the growing emphasis on technology and digitalisation within the logistics and supply chain industry are key drivers of this market growth. As supply chains become more complex due to retailers’ needs for international expansion, challenges such as customs clearance, shipping, and inventory management will become more delicate. Looking forward, 4PL providers will need to embrace IoT, AI, and blockchain to stay ahead and expand their market share.