If you work within the supply chain then you may already know the differences between a 3PL and freight forwarder. But do you know when each should be used? Or, the pros and cons that come along with each one?
Third-party logistics (3PLs) and freight forwarders are the two common types of companies that easily get interchanged but have distinguishable attributes. Understanding the differences between the two can help choose which works best for your needs.
What is a Freight Forwarder?
Firstly, freight forwarders handle transportation-related tasks for individuals or corporations. They primarily take care of the supply chain logistics of transporting goods between producers or manufacturers directly to their customers or their final destination.
Freight forwarders can work with one or multiple carriers. Additionally, they work across various methods such as air, road, sea, or rail. These types of companies have built relationships with carriers and leverage these relationships to negotiate costs of services for their clients. In addition, they will arrange the necessary documents, reserve cargo areas, and take care of insurance claims when required.
Ultimately, a freight forward is there to simply help a shipper match with a carrier so that their cargo can get from point A to point B.
What is a 3PL?
A 3PL, also known as a Third-Party Logistics company, provides a curated transportation service that takes care of your entire supply chain and logistics operations. The outsourced services include dispatching, shipment tracking, storing products, and complete administrative management.
This complete service offered by 3PL companies is possible because of their large network of connections. These connections help 3PLs offer lower rates flexibility and order-fill accuracy. Multiple tasks related to logistics can get complicated for various-sized companies.
To put it simply, a 3PL offers many supply chain related services, including the complete management of the supply chain operations. The shipper can then decide what level of services they need.
Choosing Between a 3PL and Freight Forwarder
By comparing and contrasting a freight forwarder and a 3PL company, the choice would come down to your needs and expectations. The noteworthy difference between a freight forwarder and a third-party logistics provider is that the latter will focus on all areas of logistics for its clients, whereas freight forwarders deal with mostly transportation logistics. However, freight forwarder does not actually move the products themselves because they essentially act as a “middleman.”
It’s important to remember that third-party logistics are different in that these providers will assume more responsibilities with their services in comparison to freight forwarders. The 3PL provider will provide protection to the products and be accountable for the paperwork for delivery. They take a special interest in your business and would deal with customer service issues and regulations. A good 3PL will be the complete package by seeing the process through for your products and customers.
If your company requires large-scale shipments, then a 3PL would be the option that can manage the complexity that is involved. A freight forwarding supplier may be the most cost-effective solution when your company does not need frequent level of shipment services.
Whether a company is using a 3PL or freight brokerage, it is important to be aware of what services you need and how each company can fulfill your needs. Knowing the difference between a 3PL and a freight broker is important when determining how to transport your freight.
If you are in need of a 3PL service, even if just for the simple task of moving freight from origin to destination, then you should check out HTL Freight. We have the experience and expertise required to make your shipping operations run smoothly. To find out more, you can contact us. Additionally, if you want to get started today, you can click here and request a freight quote.