What is the Difference Between a Freight Broker, a Freight Forwarder and a 3PL Provider?

June 24, 2021
compare apples to oranges and melons

By the time you read this short paragraph, 250 new companies have crossed all their bodily digits and added their businesses to the multi-coloured sea of worldwide online businesses and enterprises. Do you know what the difference is between different forms of shipping?



If you are a business owner with a product ready to send to as many retailers or companies as you conceivably can, understanding your transportation options is a complicated but essential step for the success of your business.

The general difference between a freight broker, a freight forwarder, and a 3PL provider:

  • The freight broker is a freelance agent or intermediary with limited authority or ability to control transportation outcomes.
  • The freight forwarder is a company with financial capital to have a physical warehouse and employees, who have authority, control outcomes and consolidate systems.
  • The third-party logistics (3PL) provider holds the top position. Not only have they put in measurable extra effort, but they also have all the licences and authority required for overseas and cross-border transport.

The introduction of freight brokers to the trucking industry has sometimes confused customers

1) A freight broker does not have the financial responsibility of a physical warehouse, transport truck upkeep, employee wages, gas, or business insurance. Likewise, they have no authority to fix your concerns. It is an old story; new discount companies (fill in an industry) arrive, leaving the larger costs to the more responsible companies.
With an increase in shippable products, freight companies’ responsibilities have expanded to accommodate business demands. Enter, computer savvy salespeople, also known as brokers.
Enticed to grab some of this revenue, they are now, a decade later, part of the transportation industry. Like most entrepreneurial integrations, it has been hard for freight forwarders and 3PLs to adjust.
The only equipment required is a computer and an internet connection. Although they seem like a traditional trucking company, they are intermediaries whose sole responsibility is to connect your product with a larger freight carrier or shipper, and sometimes, an independent trucker. 

2) A freight broker’s main advantage (through their lack of financial responsibility) is, they pay less for the shipment of your goods.
The money you save using a freight broker is often offset by a broker’s pressure put onto independent truckers who, to have an income, must underbid competing drivers. Ontario is the only province with imposed regulations and standards meant to create a better outcome for our vulnerable members of the trucking workforce.
‘The continued competition in this new branch of the trucking industry means these freelance drivers cannot easily afford the upkeep and safety standards of their vehicles and are forced to drive longer hours to pay bills and send their kids to soccer camp.



Freight forwarders belong to the Canadian International Freight Forwarder Association (CIFFA), ensuring they maintain high standards.

1) Freight forwarding is a business commitment that requires much initial financial capital and expertise.

Expenses within the trucking industry are precisely like those of maintaining a thirty-six thousand kilogram (or eighty thousand pounds) eighteen-wheeled car with monthly insurance costs similar to your kid’s college rent.
Freight forwarders maintain the transport trucks, the equipment whose reliability and safe upkeep allow for the physical safety of every person on the highway.
In turn, this attracts and allows the retaining of, the best and most committed drivers. Skilled operators perform and react at a higher level while driving, resulting in fewer incidents and accidents.

2) Because freight forwarders are large companies, they offer a wider range of services.
Freight forwarders arrange the shipping of your product, can offer the warehousing or storage of your goods and provide you with moment-by-moment control over the movement of your product. They have the authority to consolidate partial loads of different businesses allowing overall cost savings.

 

Third-Party Logistics (3PL) Providers Can Tick the Boxes of all of Your Transportation Needs

1) The weight of responsibility on the shoulders of each kind of transportation specialist increases with their knowledge and abilities.
A 3PL Provider may be exactly with whom you should create an alliance. If your product needs to enter the country from overseas or across a border a 3PL Provider, who is a customs broker, will handle your product’s movement most efficiently for you.
They are usually associated with mid to long-term business relationships. With an extensive variety of services available, they can manage any volume of shipments and handle all of your product supply connections.

Read our article ‘Less Than a Truckload (LTL) Shipping: How do I Stack Thee?’ to learn more perks of shipping your products with a 3PLer.

2) They can warehouse or provide storage for any size shipment, establish systems of inventory for your goods, create product labelling in different languages on your behalf, sort and repack your products and handle the timing of those separated shipments to retailers.

All this operability allows you to focus on the finer points of your business.

 

Messenger Freight Systems is a Freight Forwarder and a Third-Party Logistics provider with two locations along the 401 corridors in Ontario close to the US border.

Messenger Freight cares about and provides training for our drivers.

We also happen to have a freight train dock within our St. Thomas facility, if you require a game-changing transportation option.

 

Call the friendly staff at Messenger Freight’s two locations:

St. Thomas head office: (519) 631 9604

Cambridge office: (519) 623 9604

 

Or contact Messengerfreight.ca to start solving your transportation concerns.