- Supply chain consultancy Tompkins International is preparing to transform into a fourth-party logistics provider (4PL) with the launch of the MonarchFX Alliance, DC Velocity reported Monday.
- In contrast to 3PLs, 4PLs provide the a wider set of logistics services, acting as the single point of contact for clients.
- The creation of the MonarchFX Alliance follows this model by providing services from 3PLs Kenco Logistics and NFI Interactive, JDA Software Group and Tompkins International.
MonarchFX cites the rise of e-commerce and the need for retailers to compete with Amazon as the reason for creating the 3PL, but Amazon has set a high standard by investing heavily on its own logistics chain (albeit to little profit).
Few sellers have the capital on-hand to create a similar logistics infrastructure, however, so 4PLs have emerged as a solution that places the responsibility for the management of a logistics chain on a third party.
While most would argue such tasks are the supply chain manager's job, the increased demands on agility, visibility and resilience increase the value of a single point of contact for each link of the chain. Greater reliance on cloud-based software for data analytics and the proliferation of advanced program interfaces (APIs) as solutions are further creating a unified market for supply chain as a service.
The success of MonarchFX's business plan remains to be seen, but the alliance will prove an interesting case study on the rising value of 4PLs.