After 40 years in the ocean transportation industry, we still hear these two terms used interchangeably. However, it’s important to note the differences to avoid misunderstandings and confusion. Importing and exporting are vital to your business and being able to differentiate between third-party logistics (3PL) and freight forwarders may be the difference between a great decision for your company, and a poor one.
What are Third-Party Logistics Companies?
When you use a third-party logistics (3PL) company, you are employing an organization to handle your entire supply chain and logistics operations. These service providers will take care of services such as transportation, processing shipments, order management, inventory management, and warehousing. They can also handle your freight and distribution. However, you can usually select the services you need from them and exclude others. With their help, you can focus on other aspects of your business, such as marketing, sales, and growing your business. Some of the benefits to hiring a 3PL company include added flexibility to scale your business at any time, order-fill accuracy, low capital commitment, and more time to focus on core business values.
What are Freight Forwarders?
Freight forwarding companies, freight brokers, or freight forwarders handle all tasks related to the transportation of cargo from one destination to another using single or multiple carriers. They handle all freight-related services between producer or manufacturer to the market, customer, or final point of distribution. They are also known as non-vessel operating common carriers because they don’t move the freight but act as intermediary between you and the transportation services. Freight forwarders provide access to a robust network of ocean liners, rail freighters, trucking companies, air freighters, and many more. With their help, you can get the best price, speed, and reliability you might not get on your own. They also understand all documentation requirements, banking practices, transportation costs, and other information that makes your export process seamless. Services usually include booking cargo space, negotiating freight charges, tracking inland transformation, filing insurance claims, etc.
3PL Services vs. Freight Forwarding
3PL companies and freight brokers offer unique benefits to your business. Nevertheless, the significant difference between a freight forwarder and third-party logistics provider is that the freight forwarder focuses mainly on transportation. In contrast, 3PL providers will handle all aspects of logistics.
RTM Lines works with ocean transport managers, shippers, freight forwarders, manufacturers, distributors and decision makers across the globe. Our objective is to deliver efficient custom global transportation solutions to our customers worldwide while developing long term relationships. To get in touch with us about your next shipment, contact us here.