Freight forwarders and third-party logistics (3PL) providers are terms that often appear in logistics, sometimes even interchangeably. While both play important roles in moving goods, they serve distinct functions and have different scopes of service.
Understanding the differences can help businesses decide which partner aligns best with their needs. Here are five primary differences between freight forwarders and 3PL companies.
5 Differences Between Freight Forwarders and 3PL Logistics Companies
1. Scope of Services
Freight Forwarders
Freight forwarders focus on arranging the transportation services for shipments, specifically across international borders via air and ocean. Their role involves organizing carriers, negotiating shipping rates, and handling necessary shipping documents and customs clearance. Freight forwarders act as intermediaries between shippers and the various ocean lines or air freighters, ensuring goods move efficiently but usually without additional logistics services.
3PL Logistics Companies
A third-party logistics company offers a broader range of logistics services beyond just freight transportation. 3PL companies cover warehousing, inventory management, distribution, and sometimes value-added services like packaging or returns processing. With a 3PL, businesses gain support for the entire logistics process rather than just shipping coordination.
2. Operational Focus
Freight Forwarders
The primary focus of a freight forwarder is efficient, cost-effective international shipping and transportation of cargo. They specialize in understanding and navigating complex customs regulations, optimizing routes, and ensuring timely border crossings. Freight forwarders concentrate on the logistics of moving goods from point A to point B across international routes.
3PL Logistics Companies
3PL companies support a more complete role in logistics, managing supply chain functions from storage to distribution. They oversee the entire supply chain operations, including warehousing, inventory, and delivery management, making them a valuable partner for businesses looking to streamline and scale their logistics operations.
3. Type of Relationship with Carriers
Freight Forwarders
Freight forwarders do not own transportation assets like trucks or warehouses; instead, they establish relationships with shipping carriers and negotiate rates with air, ocean, and land carriers. They act as intermediaries, finding the most efficient shipping methods based on factors like cost, speed, and route.
3PL Logistics Companies
Many 3PL providers own transportation assets and manage distribution centers and warehousing facilities. They work directly with shipping carriers and manage the logistics functions of transporting goods, sometimes using their fleet or infrastructure. This provides them with more control over delivery times and gives them flexibility in managing various parts of the logistics chain.
4. Complexity of Services
Freight Forwarders
Freight forwarding is generally limited to organizing transportation and managing international shipments. While they handle essential aspects of the shipping process—such as customs clearance and documentation—they don’t typically manage the broader logistics needs of warehousing, inventory, or distribution.
3PL Logistics Companies
A 3PL company manages complex logistics tasks within the entire logistics framework, including warehousing, inventory control, and distribution services. They coordinate the entire logistics process for businesses, integrating transportation with storage and distribution. Their broader service scope allows them to deliver comprehensive logistics solutions that streamline the whole supply chain.
5. When to Use Each
Freight Forwarders
Freight forwarders are ideal for companies that need specialized help with international logistics or those with a limited need for logistics services. If a business’s primary requirement is to manage international shipping, especially for large volumes, a freight forwarder is a cost-effective choice. They also work well for businesses needing support with customs brokerage or international regulations without additional logistics services.
3PL Logistics Companies
3PL providers are better suited for businesses that require end-to-end logistics support across the entire supply chain. Companies that need assistance with warehousing, inventory management, returns processing, or distribution can benefit from the wide-ranging services of a 3PL provider. This is particularly beneficial for eCommerce companies, retailers, or manufacturers looking to scale and optimize their logistics process while focusing on their core business activities.
Freight Forwarding and 3PL Services With Logic-ology
At Logic-ology, we recognize that each business has unique logistics needs, which is why we provide freight forwarding services and full third-party logistics support together with the Stryder Group. Clients can rely on us to handle their international shipping needs efficiently while also offering additional logistics capabilities that extend beyond freight forwarding. Our integrated transportation services connect businesses with top carriers, and we offer end-to-end supply chain support, from warehousing to distribution.
While freight forwarders and 3PL logistics companies serve distinct roles, both are essential to an optimized supply chain. Logic-ology offers the best of both worlds, supporting your business’s growth with reliable, expert-driven logistics solutions.
Choose Logic-ology, together with Stryder Group, for efficient freight forwarding and 3PL services, combining expert cargo shipping with end-to-end logistics to power your business growth.
Contact us directly for 3PL services through form, telephone, or email.
Telephone: +1 888-564-4210
Email: sales@logic-ology.com