While both third-party logistics providers (3PLs) and freight brokers are intermediaries that facilitate the movement of goods from one place to another, they definitively serve different roles within the shipping process. The main differences between 3PLs and freight brokers lie in the scope of their services and the level of responsibility each entity has in their respective functions.
3PL vs Freight Forwarder
A 3PL is a company that offers logistics services to support supply chain operations. These services can include transportation, warehousing, inventory management, order fulfillment, and more. A 3PL usually manages and coordinates the entire logistics process on behalf of its clients. A freight brokerage, on the other hand, matches shippers with carriers and negotiates the terms of the shipment, such as rates, routes, and delivery times.
Though they both satisfy the same basic need and serve the basic goal of shipment of goods, 3PLs like WSI offer a wide range of logistics services and manage the entire supply chain for their clients. Some services available from a 3PL include the following:
- Warehousing & Distribution Fulfillment
- Advanced Order Fulfillment
- Pick, Pack & Ship Services
- Inbound and Outbound Logistics
- Warehouse Management System
- Customer Support Services
- Product Lifecycle Management
3PL vs Freight Broker Difference and Similarities
While both 3PLs and freight brokers are involved in logistics, their scope of services is different. A 3PL offers a wide range of logistics services and manages the entire supply chain for clients. A freight broker focuses only on the transportation aspect of logistics and does not handle other logistics services like warehousing or order fulfillment. A freight broker is, simply put, a middleman. They don’t usually own any shipping facilities or shipment equipment or offer any actual means of shipping themselves. In fact, they never actually touch the goods in the shipment process.
A 3PL, on the other hand, is different in this regard because they do provide actual services and handling of goods outside of merely setting up services. Their range of services does require them to own facilities and equipment that play a role in the daily operations of the actual movement of freight. They have a much bigger responsibility to their clients and play a bigger role in the shipping process.
Similarities in Partnerships and Resources of 3PLs and Freight Brokers
While a freight broker typically does not own any assets such as physical shipping equipment or means of transportation, what they can offer is an unlimited supply of partners at their fingertips. Because they partner with multiple different carrier companies, this allows them to search for the right equipment for the job, all the while handling the paperwork and communication necessary to book freight services.
Consequently, 3PLs also have a vast network of connections, allowing them to access an abundance of resources as well. 3PLs have more capabilities are more responsibilities.This is how they become responsible for the management of the entire process from start to delivery.
In short, 3PLs can be freight brokers and then some. They work to build long-lasting relationships with clients and take on a committed role in the shipment and delivery, as well as pre- and post-delivery actions of goods.
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