Ship Smarter: 3PL vs. Freight Forwarder

Thanks to the e-commerce boom, terms like "3PL" and "freight forwarding" are no longer confined to industry conversations. But while these buzzwords are more familiar, a clear understanding of their roles can still be elusive. Just like deciphering the endless stream of shipping updates ("Shipment in transit," "Out for delivery," "Attempted delivery," repeat), navigating the world of logistics partners can feel like a confusing loop.

In this post, we’ll explore 3PLs vs. freight forwarders, the two key players in the “getting your stuff from point A to point B” game. Let’s take a look at where each one excels, why both of these matter, and how to tell when you might need one over the other.

What Is a Freight Forwarder?

A freight forwarder is a company responsible for managing the movement of goods across the globe. They don't own the trucks, planes, or ships themselves. Instead, freight forwarders manage the nitty-gritty details: finding the most efficient route, securing space on the right vessel, and ensuring seamless handoffs between transportation modes, however, a freight forwarder can be considered a 3PL depending on the depth of their service offerings. 

And this is where their expertise shines. Freight forwarders leverage their high-volume shipping to negotiate lower rates with carriers, saving you money compared to booking directly. In addition, freight forwarders can handle complex multi-leg journeys, switching between land, sea, and air as needed. 

Freight forwarders also have a robust understanding of navigating customs and import/export regulations. These areas can be quite intricate. But freight forwarders have the knowledge, expertise, and experience needed to untangle the red tape, preventing costly delays and headaches.

What Is a Third-Party Logistics (3PL) Company?

A 3PL is your one-stop shop for everything warehouse and fulfillment. Unlike a freight forwarder, who focuses solely on getting your products from point A to point B, 3PLs offer a full suite of logistics services, including: 

• Transportation: Need to move your products by truck, train, plane, or ship? A 3PL can handle it all, whether it's a full truckload (FTL) or a smaller shipment (LTL). They can even manage complex multi-modal journeys. 
• Warehousing: Running your own warehouse can be costly and time-consuming. 3PLs provide the space, security, and systems to store your inventory efficiently. 
• Fulfillment: From receiving your products to processing customer orders and managing returns, a 3PL can streamline your entire fulfillment process. They can even handle tasks like inspecting your inventory or kitting products together. 

The real advantage of working with a 3PL is their ability to free you from the burden of warehouse and inventory management. From the staffing to the day-to-day tasks, partnering with a 3PL enables you to focus on what truly matters: growing your business.

Picking the Right Partner: Freight Forwarder vs. 3PL

Choosing between a freight forwarder and a 3PL can feel like picking the right tool for the job. Which one is right for your business? Let's break it down with some real-world scenarios:

• Need a Point A to Point B move? Let's say you have products stranded in Canada that need to reach New York. A freight forwarder is what you need. They’re a good option for occasional shipping needs or a one-off quick fix. They'll handle the transportation leg of the journey, getting your inventory exactly where it needs to go.
• Looking for a full service warehouse & fulfillment partner? Looking for a complete solution to move your internationally-made products to a warehouse, and then directly to your customers? A 3PL is your best option. They handle everything from shipping carriers to receiving, storage, picking, packing, and shipping your orders. 
• Small shipment? Got a limited amount of inventory? Freight forwarders can be budget-savers. They'll combine your shipment with others, filling a container and lowering costs. Their network allows them to find the most efficient route, often exceeding your cost expectations.
• Suddenly have a surge of orders from a new region? A 3PL has the infrastructure and resources in place to help your business scale. With multiple warehouses across the country, they can strategically distribute your inventory to satisfy demand and keep shipping costs low.
• Need both? It is common for 3PLs to partner with freight forwarders to meet all of their logistics needs. This is common with freight forwarders who offer their clients a wide range of services under one roof! 

Build a Long-Term Logistics Partnership With a 3PL

Choosing between a freight forwarder and a 3PL is like picking a travel buddy: are you looking for a one-time adventure or a lifelong travel companion? If you need a dedicated logistics partner who will manage your entire fulfillment process, from start to finish, then a 3PL like Smart Warehousing is your answer.

With a wide range of customizable solutions, including nationwide 1-2 day shipping, omnichannel integrations, and completely transparent inventory visibility, the Smart Warehousing team will ensure your logistics run as seamlessly as possible. Contact us today to learn more.