When running a business, you need the right partners working alongside you to help you grow your business and achieve your goals. Freight forwarders and logistics companies may be some potential partners that you’re considering, and it can be difficult to decide which option to choose.
RPM is here to tell you everything you need to know about freight forwarders and logistics companies so that you can make an informed decision for the benefit of your business.
What Is a Freight Forwarder?
Freight forwarders coordinate the shipment of goods from one place to another. And while freight forwarders may look like basic intermediaries between shippers and carriers, they do more than initially meets the eye.
Freight Forwarding Agents Handle Shipments for Other Companies
As you now know, freight forwarding agents handle shipments for other companies. However, they do more than just arrange transportation. They also handle other aspects of the transportation process, including negotiating tariffs and dealing with customs — services that can be invaluable if you’re looking for a quick and painless shipping process.
Do Freight Forwarders Have Their Own Transportation Assets?
Freight forwarders do not possess and maintain their own transportation assets like trucks and trains. Instead, they work with a variety of different carriers and partners to arrange safe and efficient transport. For example, freight forwarders can arrange transportation via boat, rail, road, or air.
Is a Freight Forwarder Different From a Shipping Agent?
Freight forwarders and shipping agents may seem like the same thing, but there are a few key differences to keep in mind. For starters, all freight forwarders are essentially shipping agents, but not all shipping agents are necessarily freight forwarders.
This means that freight forwarders are able to provide more extensive services and oversee the entire shipping process, whereas shipping agents tend to only focus on one mode of transportation. And since most journeys will require more than one mode of transportation, shipping agents may only be able to assist with a single component.
Is a Courier Different From a Freight Forwarder?
A courier is another shipping entity that sounds similar to a freight forwarder but is actually quite different. A courier is generally used to transport a single package or item rather than a large number of items.
As a result, couriers typically come with size and weight limits, and most packages have to be less than 150 pounds. Courier shipping also tends to be faster than freight forwarding, and this service is actually quite similar to traditional mail delivery services.
Why Do Companies Hire Freight Forwarding Agents?
So why do companies hire freight forwarding agents to coordinate their shipments? It really comes down to time and convenience.
Freight Forwarding Agents Save Companies Time
Most importantly, freight forwarding agents save companies a lot of time that they can then invest elsewhere. Since freight forwarding agents have an established network of partners that they work with, it’s easy for them to find the right partner to meet the company’s shipping needs.
With a freight forwarder, there’s no need to get quotes from different carriers, vet them, and negotiate with them. Instead, the freight forwarder handles everything!
A Freight Forwarding Agent Deals With Receipts and Commercial Inboxes
A freight forwarding agent goes beyond simply arranging transportation and also deals with receipts and commercial inboxes. Using a skilled and experienced freight forwarder helps companies stay organized in terms of documentation and operational in terms of clearing customs and other restrictions.
What Is a Logistics Company?
A logistics company helps plan, implement, and control the movement and storage of goods within a supply chain. Depending on your needs and budget, a logistics company can help with receiving inventory, warehousing inventory, picking orders, packing orders, shipping orders, and processing returns.
Logistics companies may have multiple different warehouses across the country, which helps you ship your orders quickly and meet customer expectations. Logistics companies may also have partnerships with shipping companies, which may result in valuable shipping discounts.
Logistic Companies Manage Transportation of Goods for Other Companies
Perhaps the most important task of a logistics company is to manage the transportation of goods for other companies. Depending on the industry and company structure, transportation can be quite complex.
For example, the company may need to transport raw materials to manufacture before then transporting manufactured products to warehouses, retailers, and/or directly to customers. The company may also need to transport materials or products from one country to another, dealing with customs regulations and restrictions along the way. The company may also need to utilize different modes of transportation along the way, switching from boats to trains, trucks, and planes.
What Does Third-Party Logistics (3PL) Mean?
A third-party logistics company or 3PL is an outsourced business that companies can partner with to handle various aspects of their logistics, fulfillment, and supply chain management. Outsourcing these tasks often helps companies save money since they don’t have to hire and train logistics experts and employees in-house.
Outsourcing these tasks also helps companies, especially small and new companies, save time since they don’t have to worry about handling these items all on their own. Instead, 3PL companies are able to offer a more experienced and efficient approach to logistics, fulfillment, and supply chain management. Meanwhile, companies can focus on other more important tasks that are more in line with their expertise and priorities.
Can 3PL Companies Handle Invoices?
Many 3PL companies can handle invoices thanks to dedicated technology solutions designed to handle everything from invoices to payments to shipping and everything in between. Again, when you work with a 3PL company that maintains such a tool, you don’t have to worry about using and paying for it on your own.
And since 3PL companies can handle invoices, they can offer a more seamless fulfillment process from start to finish. They receive invoices directly and work to complete them accurately and in a timely manner.
Is a Logistics Company a Better Choice Than a Freight Forwarder?
Depending on your needs, a logistics company might be a better choice than a freight forwarder. Logistics companies are able to handle different aspects of logistics, whereas freight forwarders are only able to handle transportation. So if you’re looking for the most comprehensive and convenient logistics solution designed to make your life easier, you may want to go with a logistics company.
What To Look for in a Logistics Company
That being said, not all logistics companies are created equal. In order to really benefit from their services, you need to work with a qualified and experienced company.
For starters, you need to look for a logistics company that has experience in your industry. This is because handling logistics for consumer packaged goods is very different than handling logistics for hazardous chemicals.
You also need to look for a logistics company that has the capacity and services to meet your needs. For example, are you looking for less-than-truckload shipping (LTL) or full truckload shipping (FTL)? Do you need specialized shipping in refrigerated trailers or will dry vans do? Is your busy season during peak shipping season? These are all questions to ask yourself when choosing a logistics company to partner with.
Finally, you need to look for a logistics company that has a good reputation and proven results. Be sure to check client reviews for each company you’re considering. You can even go a step further and ask for a few references that you can contact on your own. At the end of the day, your due diligence will help ensure that you make the right choice.
Conclusion
No matter your answer to these questions, RPM is a qualified and experienced logistics company that’s ready and willing to meet your needs. RPM is able to handle high shipping capacities thanks to a network of over 40,000 carriers.
This extensive network provides you with access to different equipment and certifications, including reefer and hazardous materials transportation licenses, in addition to basic dry vans and commercial driver’s licenses.
Reach out to RPM today to see how we can meet your shipping and logistics needs.
Sources:
Freight Forwarders, Are You Adding Value to Your Customers' Businesses? | Forbes
Guide to 3PL Logistics | Business News Daily
5 Factors to Consider When Choosing a Third-Party Logistics Partner | Inc.com
