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{"id":8152,"date":"2020-02-12T16:25:07","date_gmt":"2020-02-12T21:25:07","guid":{"rendered":"https:\/\/newtruckload.rlgrandd.com\/3pl-vs-freight-broker-whats-the-difference\/"},"modified":"2023-05-05T15:49:36","modified_gmt":"2023-05-05T19:49:36","slug":"3pl-vs-freight-broker-whats-the-difference","status":"publish","type":"post","link":"https:\/\/newtruckload.rlgrandd.com\/3pl-vs-freight-broker-whats-the-difference\/","title":{"rendered":"3PL vs Freight Broker: What's the Difference?"},"content":{"rendered":"\n

3PL vs Freight Broker: what\u2019s the difference? It turns out that the answer isn\u2019t as apparent as you might think. While people regularly use these terms interchangeably, there are subtle differences between these two transportation services. Complicating matters further is the fact that some freight brokers offer aspects of 3PL services and vice versa, so there\u2019s a degree of overlap. They\u2019re not always different things. <\/span><\/p>\n\n\n\n

Working with a 3PL vs freight broker can mean different things. Though the terms are occasionally used interchangeably, they are not the same thing. In simplest terms, a 3PL is a partner for your business\u2019s full supply chain needs. On the other hand, a freight broker is an intermediary that works between your business and a shipping partner.<\/b><\/p>\n\n\n\n

Are you investigating third-party logistics and transportation options for your growing business? If so, then you may have asked yourself the question: \"3PL vs freight broker - what\u2019s the difference?\" In this article, we\u2019re going to define what these two distinct yet related services actually are and then look at the differences between them. By the end of the article, you should have a much better understanding of why you might want to choose one service over another. We will look at the benefits and advantages of each and the type of businesses that stand to gain the most from using their services. At the end, we\u2019ll take a look at how partnerships between transport services and shippers work in practice, preparing you for any relationships you might form in the future.<\/span><\/p>\n\n\n\n

What Does 3PL Stand For in Logistics?<\/span><\/h2>\n\n\n\n

3PL stands for \u201cthird-party logistics\u201d and essentially encompasses all logistical operations conducted on behalf of one firm by another. Depending on the source, you may also see the abbreviation \u201cTPL\u201d too, although this is less common. <\/span><\/p>\n\n\n\n

3PL companies began offering their services in the mid-1980s. The Motor Carrier Act of 1980 meant that the number of carriers in the US could expand, opening up opportunities for entrepreneurs to offer third-party logistics services. In the 1970s, there were as few as 20,000 carriers. Today there are more than 1.2 million operating in the US alone, with millions more worldwide.<\/span><\/p>\n\n\n\n

The growth of 3PL went into high gear in the 1990s as foreign enterprises and countries saw the benefits of the US model and began to copy it. In China, for instance, firms adopted the 3PL model because it allowed them to bypass the costs of organizing their distribution in-house. Furthermore, as supply chains became ever more intricate, businesses couldn\u2019t always manage them by themselves effectively - they needed outside help. <\/span><\/p>\n\n\n\n

In the 2000s, a set of technological advancements made 3PL more compelling still. Third-party companies developed digital systems that automated a lot of the grunt work involved in trucking, allowing firms to direct multiple assignments of goods all over the world, wherever they were needed, without adding to administrative costs. The integration of logistical systems helped to streamline business processes and make the entire matter of getting goods to the right location more efficient. <\/span><\/p>\n\n\n\n\n\n

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What is a 3PL?<\/span><\/h2>\n\n\n\n

3PL (third-party logistics) are services that allow companies to outsource some or all of their supply chain management to another company. By handing over the reins to specialists, they hope to reduce costs, improve efficiency, and create more complex operational networks. Any external company that offers services for storing or shipping items is usually classified as 3PL. <\/span><\/p>\n\n\n\n

The structure of the industry, however, isn\u2019t as straightforward as you might imagine. While some providers offer an all-inclusive service, others may focus on a specific aspect of supply chain management, such as transportation or warehouse storage. A trucking company, for instance, can take goods from A to B but might not have facilities that allow it to process and distribute products to customers, whereas a comprehensive service might. <\/span><\/p>\n<\/div>\n\n\n\n

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The services offered by 3PL firms include: <\/span><\/p>\n\n\n\n