3PL vs. Freight Broker: who do you decide to use?

  • 3PL vs Freight BrokerDo you need the support of a 3PL (third party logistics) or a Freight Broker?

    Logistics has a vital role to play in bringing people and products together. According to the FTA, in 2015 HGVs travelled 25.7 billion km moving goods across the UK, and 9.51 million containers were handled by UK ports.

    Logistics is vital for the strength of our economy and plays such an important role in the success of business operations. That’s why it is important for businesses to determine what kind of support you require from an external logistics provider.

    Firstly, we need to begin by asking…‘what is the difference between 3PL services and a Freight Broker?’ Often the terms are used interchangeably, but their services do differ.

    What is a Freight Broker?

    A Freight Broker works by connecting a business which has cargo, with a business who has the capacity to move it. The Freight Broker works as a middle man, ensuring the deal with the shipper and carrier is successful. A Freight Broker’s job is like that of a Freight Forwarder, except that a Freight Broker will not take possession of the goods at any point.

    What is 3PL?

    Third party logistics (3PL) works as an extension of a company’s logistics department, providing a wide range of supply chain services that a Freight Broker does not. For example, a 3PL will likely have its own warehousing facilities and their own vehicles for moving freight. Unlike Freight Brokers, 3PL companies will invest in staff and technology to provide a variety of transportation needs for shippers and carriers.  They will take possession of the goods.

    What should you decide to use?

    It all depends on the level of service you require when it comes to transporting goods. While a Freight Broker will arrange to move cargo from one point to another, a 3PL provider will move, store and process inventory, offering a more comprehensive service. A high quality 3PL will work alongside you, to ensure strong relationships are built with suppliers and carriers, making sure your goods arrive on time and in the same condition as when they left your premises.

    How do you go about choosing the right 3PL provider?

     If you require the services of a 3PL, it’s important that you choose a supplier that can fulfil your requirements, and support your business. You need to consider:

    • Type of equipment available – how spacious and secure is their warehouse? How extensive and modern is their fleet? How do they manage stock and track it?
    • Level of service – Will they go that extra mile for you? Are they friendly, honest and reliable? Do they value the service they provide?
    • Their employees – How do they treat their staff? Do they seem happy? What is their staff retention like?
    • Locality – If you need links to motorways, ports or major cities, is your potential logistics provider in a good location?
    • Flexibility – If you needed a large order picking and distributing at short notice, would they be able to fulfil it? If your business grows, can they support your growth?

    Are you looking to improve your logistics operations? Contact Masters today on 01353 648222

    Comments (2)

    • Always a good read, thank you Merv.

    • When a company uses a 3PL, they are able to scale space, labor, and transportation according to current inventory. Additionally, 3PLs are often able to ease the transition between seasonal periods and industry fluctuation.