Third Party Logistics vs. Freight Forwarding Companies: Key Differences and Why You Should Hire a 3PL

Third Party Logistics vs. Freight Forwarding Companies: Why Hire a 3PL

When people talk about the freight industry, you will hear the terms 3PL and freight forwarding companies used interchangeably.  Not sure of the difference? We are here to help. You’ll be able to make an informed decision about which is the best fit for your company.

Not sure of the difference? We are here to help. You’ll be able to make an informed decision about which is the best fit for your company.

What are Third Party Logistics Services?

A 3PL is a full-service company that is going to take care of everything for you when it comes to freight shipping. They can take care of everything from warehousing to shipping.

Streamline the Process

Their specialty is streamlining your logistics processes. Some of them will even take responsibility for your shipment while it is in their care during transit.

Instant Updates

Most 3PLs will have an online portal for their customers. This lets you get real-time updates on your shipments.

Negotiated Rates

A 3PL works with carriers to get the best rates based on their high volume of shipments. They will do the work for you of finding the best rate for warehousing too.

Full Service

You won’t have to worry about making the tough decisions when it comes to your supply chain management. Your 3PL can find warehousing, packers, and anything else that can streamline and optimize your logistics processes.

The best part is that if any of your shipments get lost or damaged the 3PL will handle it for you. You can continue to run your business while your 3PL takes care of the problems.

What Are Freight Forwarding Companies?

A freight forwarder can help you make the necessary arrangements to get your shipments from the pickup location to the drop off destination. Using a freight forwarder can help make the process easier by acting as a broker.

Limited Responsibility

Unlike 3PLs, your freight forwarder is not responsible for your shipment at any time. They only act as a go-between for you and the carriers.

Why Your Company Needs a 3PL

The freight industry and logistics are complicated. They are also heavily based on relationships and shipping volume. The best thing you can do is find a well-established 3PL.

Relationships

You can leverage their relationships into a more cost-effective supply chain for you. Not only do you benefit cost wise, but you also benefit from their knowledge and experience.

Company Resources

With a 3PL you don’t need to have a full in-house logistics department. This can help your business save on both overhead and employee costs. Now your company’s resources are freed up to be focused on your core competencies.

Pick and Choose

Thanks to the 3Pl’s abilities you have the option of picking and choosing the services that work best for you. This lets you get the help that you need in the areas that you need.

You can also increase your services as your business grows. For example, in the beginning, you only needed shipping assistance. But now your company has grown and you need warehousing help.

Then in the future, you will need picking and packing services. As your business grows you can increase your services with the 3PL to continue to expand with you. You will save by combining all of these services.

Choose a 3PL

You don’t want to choose just any 3PL to partner with. Start by doing your research into potential providers. You want a 3PL that has a proven track record of success.

You also want a company that has a robust suite of services and technology. This will allow you to integrate with them to streamline the logistics management process.

Aim to choose a provider that can scale their services to fit your needs. Otherwise, you will set yourself up for having to do this whole process over again.

Ask potential 3PLs what their commitment to innovation is. You want a partner who will continually work to improve and innovate. This will make you competitive in your industry by utilizing the latest strategies in logistics.

Finally, ask about the 3PL’s network. Do they have the infrastructure that is located in logical places to help you? A good logistics company is going to have locations placed in the right places for optimal efficiency.

Start Benefiting from 3PL Services Today

As you can see, freight forwarding companies simply can’t provide a comparable level of service as 3PL providers. Think of the forwarding companies more as a shipping coordinator. They are going to help you arrange your shipment by coordinating with multiple carriers.

While a 3PL is a full-service logistics solution. They will handle all things shipping and supply chain for you. They can take care of the things you don’t have the time or experience to handle.

Ready to get started with a company that can handle your logistics needs?

Request a quote today and let us help you get shipping.

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