Forwarding company or 3pl operator: what is the difference and who to choose?

Forwarding company or 3pl operator: what is the difference and who to choose?

E-commerce is a relevant, profitable business that brings significant income and makes up the lion’s share of the Ukrainian entrepreneur’s profits. However, novice business people ready to work with imported goods do not know all the logistics stages and face the need to choose a contractor. But which contractor will it be – a 3PL operator or a forwarding company?

In this article, we will look at the specifics of two operators – 3PL and a forwarder, so that you can decide who to contact with goods shipping.

Freight Forwarder

A forwarding company is an intermediary between shippers and owners of transport vessels. Its representatives check the schedules, requirements of shippers and carriers and track the cargo.

The forwarder’s advantage is solving problems that the client faces when sending the goods on their own. He can complete customs clearance in the destination country, choose a convenient route and transport, and check cargo. In addition, the forwarder has the opportunity to provide lower rates due to agreements with freight companies for the volume of goods.

He also coordinates cargo delivery by several modes of transport, for example, by plane and truck, ship and truck, etc.

Forwarders are well versed in customs clearance for import and export. Ignorance of these processes can lead to cargo delays at the border and even arrest.

3PL operator

It is an organization that can manage several different processes. The 3PL operator is responsible for one, two, or more of the following actions:

Transport

The service includes transportation services, mainly sea and air freights. Sea freight is more economical than shipping by air, but it takes more time. Air transportation is in demand when deadlines are burning, and you must deliver products within a few days.

If it is necessary to take the cargo from the manufacturer’s warehouse and deliver it to the airport or port, you will need a truck. Truck freight is also required when you need to provide the goods to the importing country’s final consumer.

Warehouse logistics and fulfillment

3PL operator supervises cargo receipt, inventory management, returns, e-commerce fulfillment, B2B fulfillment, production inspections, etc. It can offer a warehousing service that includes accepting cargo, distribution, repacking, storage, and dispatching goods to the final destination.

The value of 3PL lies not only in the service of shipping and customs clearance but also in relationships with carriers, foreign agents, brokers, as well as in storage facilities, and the possibility of turnkey fulfillment.

By transferring all the processes for organizing the transportation, storage, and goods shipping, e-commerce sellers eliminate the worries of renting warehouses, hiring employees, and solving hundreds of daily tasks for doing business abroad.

How to choose between forwarder and 3PL

If you are only interested in moving inventory from one location to another – for example, you need to transport a product from Canada to Michigan once – then a forwarder is your best choice. If you need a full range of services, from transportation to warehouse logistics, you should immediately contact the 3PL operator.

The 3PL company knows the logistics processes thoroughly and will help you quickly receive, place inventory, assemble, pack, and ship products to the customer.

If you don’t have enough goods to fill an entire container (FCL), 3PL will offer cost-effective LCL shipping by bundling orders from different customers into one container.

If you have expanded your sales geography and received many customers from the United States, a 3PL company can easily handle the task of shipping goods to them. Most 3PL providers have more than one warehouse and work on optimal inventory distribution, reducing freight costs and time.

Conclusions

It is important to remember that 3PL combines the functions of a forwarder, offering more services for the delivery, transportation, and storage of products. Therefore, even if you are only interested in goods shipping, you should immediately contact the 3PL provider to avoid changing the contractor later.

Do you want to know how to organize the delivery of products abroad? Contact the 3PL managers of the PartnerTrade operator. Our experts will help you determine which type of transport is best for your cargo, how to pack it properly, and what documentation you need to collect, deliver and store the goods in the importing country.