What Distinguishes 3PL From A Freight Forwarder?


With so many freight forwarders out there, what distinguishes them from each other? And why do they charge different rates? This post will discover what distinguishes 3PL from a freight forwarder.

What Distinguishes 3PL From A Freight Forwarder?

There is only one way to determine the difference between 3PL and freight forwarding. Examine the number of services provided by each of them. 3PL will coordinate all aspects of a shipment. But, a freight forwarder will handle the transportation of goods.

The term “third-party logistics” encompasses different kinds of services. At the most superficial level, a 3PL coordinates warehouse-related services. Therefore, 3PLs provide these services to smaller businesses that do not have logistics departments.

As part of 3PL services, freight forwarders may be hired to handle cargo transfers. So, a freight forwarder is not considered a 3PL. This is because he provides shipping and transportation only.

Why Should You Distinguish Between A 3PL And A Freight Forwarder?

While 3PLs and freight forwarders offer similar services, their roles are different. Thus, an in-depth understanding of both services is essential. Before deciding on a 3PL or freight forwarder service, read about what they entail.

As the world becomes smaller, businesses need to move goods. But, this can be challenging for many companies. Many companies don’t have the resources to manage their own logistics operations.

So what is a 3PL? It’s an abbreviation for “third-party logistics provider.” A 3PL company specializes in transporting goods from one place to another. So, they manage everything from the point of origin to the point of delivery.

A freight forwarder is a type of 3PL specializing in moving goods across borders. In contrast, an international freight forwarder would handle only international shipments.

What is a freight forwarder? 

A freight forwarder organizes shipments for firms and individuals. They do this by conveying goods from the manufacturer to the customers. But what distinguishes 3PL from a freight forwarder?

A forwarding firm collaborates with businesses to deliver orders. It uses one or many cargoes and other shipping techniques.

For instance, a freight forwarder can help you move a shipment from Akron to Edinburgh. After that, you can use water freight to England. Then finally, by road, to the final destination.

While your delivery process may be simplified, utilizing several carriers can be difficult. So, a freight forwarder makes it simpler by arranging every transport for you. 

They set up shipping services for their customers. The services delivered by a freight forwarder include:

  • Marine freight 
  • Highway/land freight
  • Airfreight 
  • Documentation of import and export

Why Firms Chooses A Freight Forwarder

Freight forwarders are the ones who handle the logistics of a shipment. They help you plan your shipments and ensure they arrive on time. Plus, they ensure that goods are delivered to their final destination.

The most prominent reason firms choose freight forwarders is to avoid the tedious paperwork. So if you’re already busy running your company. In that case, it makes sense to hire someone else to do all this for you. You want to do the groundwork for something as important as shipping!

Freight forwarders may get better rates due to their relationships with various carriers. This means they’ll be able to find the best way for your cargo to get where it needs to go. This will translate into savings, which is excellent news for your bottom line!

Finally, using a freight forwarder gives you peace of mind. This is because you know that someone else is taking care of everything for you. You don’t have time for delays or problems along the way. So, let them worry about those things while you focus on growing your business instead!

What is a third-party logistics firm?

A third-party logistics firm is a full-service order fulfillment company. The third-party company supervises the whole supply chain, from warehousing to transportation. They also look after the inventory while it is in the warehouse. For instance, moving your items from Akron to Scotland is pretty straightforward.

The 3PL takes care of the entire process. If anything goes missing, the 3PL carrier will resolve it. The hassle is eliminated. So you can be sure that your items are getting to suitable locations.

The need for third-party logistics providers increases as customer expectations increase. It is hard for start-ups and SMEs to keep up with increasing customer demands.

It is becoming increasingly challenging to keep up with the latest technological advances. Change and innovation are accelerating, leaving no room for slow learners.

So, third-party logistics providers free up precious business time. They also offer professional advice and help with several logistics decisions. To ensure business owners are on top of their game.

Outsourcing to a third-party logistics firm offers ease and saves resources. Here are several services provided by a 3PL firm:

  • Warehousing and storage 
  • Business-to-business fulfillment 
  • Direct-to-client fulfillment 
  • Order fulfillment for retailers
  • Assembling and kitting of products 
  • Freight forwarding management.
  • Reverse logistics

A third-party logistics company or freight forwarder?

Each service has its perks. But consider the difference before deciding what’s best for your business.

A third-party logistics company offers a complete and customized service. Also, a freight forwarder acts as an intermediary between shippers and freight carriers. A third-party logistics firm performs several warehousing functions on behalf of a firm.

Freight forwarders are distinguished by offering a broker-type service designed to move items. It is usually in bulk, from one point to another. They are middlemen who specialize in organizing everything within their scope. This means a freight forwarder can not perform all the duties of a 3PL. A 3PL performs the function of a freight forwarding firm alongside other 3PL duties.

Conclusion 

3PLs are responsible for the storage and distribution of your goods. Freight forwarders work with clients to transport their goods. The main difference between these two services is the nature of their service. Freight forwarding focuses on transportation, while 3PLs offer added services. Outline your business needs before choosing a 3PL or freight forwarding service. With this, you can select the best fit for your business.

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