The Differences Between Freight Forwarders and 3PL And How to Figure Out What’s the Best Option For You

September 6, 2022

Thanks to modern technology, the world’s economies have been able to communicate and connect at a speed and scale never before imagined, these days, you can now shop for pretty much anything under the sun, and have said products delivered to your address, all from the comfort of your own home, this type of supply chain, has only become so advanced, interconnected, and delicate thanks to the power of logistics.

Logistics has especially grown in importance in recent years thanks to the pandemic when online shopping grew so much in popularity that it has practically become a normal part of everyday life. As such it is important for consumers and businesses alike to have an understanding of how logistics plays a role in the supply chain.

In particular, the roles 3rd party Logistics (3pl) companies and freight forwarders play in the Philippines’ supply chain, their similarities and differences and the kind of services they typically do.

The first thing we should address is the fact that 3pl companies and freight forwarders- though the two terms are often used interchangeably, are actually different.

What is a Freight Forwarder Do?

As the name itself implies, a freight forwarder’s primary purpose is to help you navigate the very complex processes involved in shipping cargo from place to place, the freight forwarder will be responsible for everything from accomplishing the necessary documentation to getting your cargo passed customs.

What is a 3PL?

In contrast to Freight forwarders, 3pl companies are present in more facets of the supply chain. This means that not only does a 3pl company handle shipping, but this type of logistics company will also handle real- time tracking of your parcel, warehouse management, technical support, you name it, a 3pl can and will probably do it.

Read: MAKE YOUR OWN SUCCESS STORY WITH A 3PL COMPANY

The Big Difference

Though 3pl companies and freight forwarders can ostensibly be considered third parties with the purpose of helping move cargo shipments from point A to point B. However, the biggest difference between the two types of logistics companies is the nature and variety of services that they are capable of offering. In general, 3pl companies offer more flexibility and a wider range of services as compared to a freight forwarder.

How to Decide What’s Best for You?

Considering the flexibility and variety of services that 3PL companies in the Philippines can offer, it is conceivable for one to think that freight forwarders are pointless and wonder why they even exist in the modern day? Well my dear reader, though the flexibility of 3pl can be quite attractive, it often comes at a price, so if you are a small business that makes less than approximately 250 sales per week, then you can get away with utilizing the services of a freight forwarder, however if your business exceeds 250 sales a week, that is where the services of 3PL can come in handy thanks to economy of scale.

Conclusion

Looking from surface level, it may initially seem that freight forwarders have become obsolete when compared to 3pl in the Philippines. However, both types of logistics companies have a place and purpose within the supply chain. Hence why it is important for you to assess your needs in order to figure out which one is best for you to get the best bang for your buck.

For further reading: AIR FREIGHT VS SEA FREIGHT