The transportation industry has many industry-specific terms that come up frequently when discussing even routine matters of business. Thus, it should come as a shock to no one that there are a lot of terms that the public may not be incredibly familiar with. We want to look at one specific concept in transportation that deserves some additional explanation: 3PL freight. Let’s dive in!
What Is a 3PL Freight Brokerage?
Trucking companies make a lot of commitments to a lot of different customers. They never want to lose any of their business if they can avoid it. However, this also means that they have to produce the resources necessary to meet all of that demand. That is a much tougher challenge than it may at first seem. Therefore, many companies rely on third-party services to assist them with some of the promises that they have made.
A 3PL brokerage is a third-party broker that can handle a variety of logistics and transportation needs for all kinds of goods.
3PL transportation allows you to focus more of your time and energy on the customer experience instead of worrying about the logistics of freight. Thus, you should take it for granted that you will use some third-party resources to help you get what you need out of your company.
A few of the services offered by a 3PL transportation company include:
- Handling returns
- Storage needs
- Retail fulfillment
These are the stepping stones of what any great transportation company does, and it just makes sense that you would also want to work on these critical aspects of what helps make your company operate as smoothly as it does.
How Is a 3PL Transportation Company Different From A Freight Forwarder?
When you first hear about what a 3PL company does and what a freight forwarder does, they can seem to be one and the same, but that is not quite true. There are some key differences, and there are important reasons why you will want to hire a freight forwarder versus a 3PL company in certain circumstances.
A freight forwarder helps with these types of services:
- Air freight
- Land freight
- Ocean freight
- Import documents
- Export documents
What you can see is that a freight forwarder is much more involved with the literal transportation of the freight. You don’t get that with a 3PL company, and that is one of the major reasons why they are so different. You can see how people might get them confused, but you should try to keep them separated in your mind because they really do different things.
A freight forwarder really comes in handy when there are packages that have been promised to an end customer but the transportation company is unable to meet those deliveries on their own capacity. That happens sometimes when they overpromise to a variety of customers. Partnering with a freight forwarder means that they can finally get some traction with the customers that they are meant to serve, and they never have to drop the ball on a shipment. The freight forwarder takes a cut for providing this service, but that expense is well worth it when the client is able to provide their customers with the freight that they ordered right when they ordered it.
Third-Party Partners Will Continue to Help in Times of Crisis
There is a role for everyone to play in helping to solve the supply chain crisis that the world has found itself in. Freight forwards are certainly part of the solution. They are working hard to try to alleviate some of the strain that global supply chains have been under since the pandemic began.
What is called for at a time like this is coordination between private industry and governments around the world. It seems incredibly challenging to get everyone together to work on something like this, but we have no other choice. For private industry to continue to be as profitable as possible, we will all have to pull together to work out the clogs in the supply chain.
For more information on how 3PL freight works and how it can help your business, please contact us.