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Third-Party Logistics Companies vs Freight Forwarders: Know the Difference

Third-Party Logistics Companies vs Freight Forwarders: Know the Difference

People often get confused with the heavy logistics terminology. As a dummy looking for outsourcing your logistics you can easily mix third-party logistics with a local freight company. But for the world of logistics, they are very different, despite sharing a few similarities their differences make them impossible to interchange with each other.

When looking for the services that can help your business requirement regarding exporting and importing you might find yourselves at crossroads of choosing between these two services. Every business owner wants to make the best decision for their enterprise and knowing the difference between a 3PL logistics in Melbourne and the local freight company is very crucial for you.

What are freight forwarder companies (FREIGHT FORWARDERS/NVOCCs)?

Many names are used for a local freight company in Melbourne such as freight forwarder, forwarder or simply forwarding agent. To understand them think them as a person or company that arranges transportation for individual or cargo for big corporations from manufacturer, in simpler terms, they help moving goods from point A to B. Their contract is with the shipping line often the big companies that deal with multiple shipping lines as they need to move a large number of goods. They are an important part of a supply link, they help in providing carriers and can use different vessels for shipping that include airplanes, trucks, and railroads, and often use intermodal methods for a single shipment.

What are third-party logistics companies?

3PL logistics in Melbourne offer broader services than the freight forward service. They can cover all the requirements of the company logistics activities and supply chain management. They also offer different services such as warehousing and transportation services these are the specialized services and can be customized as per your needs. For example, if you need to grow more you can use service 3PL warehouse facilities for your storage needs when delivering a product to retail or market.

They do help move the goods but are offer several extra services like storing shipments between the transportation points, processing shipments and taking items from vehicles and packaging them with an invoice per client drop-off and providing visibility into distribution channels.

What you should choose?

3PL Services vs. Freight Forwarding

Local Freight Company in Melbourne a broker-type service:

They are the middle man that helps in coordinating pretty much everything from booking cargo to the insurance claims. But these are the end line of their work, beyond that they have no solution for the warehouse. Their primary focus is to move the good from point A to point B and other needs such as organizing warehouse for storage, picking and packing are your responsibility.

3PL providers 

They are full-service providers that can help you look like an Amazon. They take care of the entire supplying chain process. That means they provide you 3PL warehouse facilities to help you in picking and packing and ship-to destination.

Due to similar features, the line between both gets blurry making hard for you to choose between both. But you can use these differences can offer you more clarity while choosing between both.

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