What Is A Logistics Company?

A logistics company has the expertise to help a client manage, control and plan how to get products from suppliers to consumers using different transportation method.

The work is sometimes very detailed and it requires excellence in attention to detail which is why a logistics business hires only the best workers.

Logistics is a term synonymous with the military. In times of war supplying troops with the proper military equipment and supplies was a logistics function.

Logistics services has evolved since the 1950s with the rise of the consumer industry and the subsequent growth of a more complex supply chain.

The global logistics services industry is a network of businesses and individuals working together to move items like equipment and machinery from one place to another.

These carriers and companies make up the supply chain. Most do not initially specialize in this area, but their day-to-day services carry them along the chain at some point.

Whether the movement be of small or large goods, the operations involved are consistent throughout.

The supply chain is a vital part of this process. A proper supply chain may include logistics, transportation, shipping, receiving, storage, and management of all or one of these functions.

A logistics specialist may also apply to information, transportation, inventory, warehousing, material handling, packaging, disposal, and security within the business sector.

3PL vs. Freight Broker

Using the terms “3PL” and “freight broker” interchangeably is common, but it creates a lot of confusion. A freight broker works to meet specific cost savings and service goals for one or more shipments.

The 3PL provider considers both the big picture and small details of the transport chain and delivery process from beginning to end, this allows for complete solutions that support companies and their customers

They think in advance about a client’s business needs while they plan operations and technology needs further down the supply chain.

What is a freight broker?

Freight brokers connect trucking companies with private shipping companies moving a haul to be transported for customers.

For each shipped item or shipment, a freight broker will have to take into account weight and size of the goods being sent and what mode of transport is most suitable for such goods.

The main job specifics of a freight broker include: communicating with the client organization and carriers, time management and accountability.

Freight brokers are usually paid by clients upon completion of their service.

In the grand scheme of things, freight brokers play a vital role in connecting shippers and smaller carriers with larger carriers across a vast network.

What this does is afford shippers options and allows for cheaper prices since the average small-time carrier cannot compete against the larger carriers.

Since large 3PL companies have established relationships with big carriers, they have more leverage when it comes time to negotiate under favorable terms for shippers.

The beauty of employing freight brokers is that they may work as an independent agent on behalf of multiple carriers from various price points – which is why many shippers rely heavily on them for business and customer satisfaction.

What is a 3PL?

3PL is a term associated with any service contract designed to manage the storing, or shipping of a commodity.

A third party logistics company may only offer a single service, like transportation. However, it may also offer a system-wide bundling of services and management of a client’s entire supply chain.

Many 3rd party logistics companies integrate operations in such areas such as warehousing and transportation services, all with a focus an individual’s needs.

A third-party logistics company is a trusted asset to companies of the likes of Amazon, Ebay, and Etsy.

Shippers can rest assured that with a TPL company on board they are guaranteed safe delivery by means of trucks and roadways.

Third-party logistics companies typically take efficiency to the next level by having their own employees on site to watch over things in order to keep products moving along as per schedule unless something unexpected or out of the ordinary should arise.

Thus guaranteeing freight isn’t delayed because of problems outside the company’s control and maintaining customer satisfaction.

By providing goods transportation solutions known carriers are able to cut costs significantly and safely move a single shipment from point A to point B.

Why shippers need a mix of brokers and 3PL providers

Shippers in need of an experienced third party with a large variety of resources to handle any situation may find that a freight broker will best fit their needs.

However, for established shippers looking to add a little unorthodoxy to their otherwise complicated shipping needs, they may give the 3PL a break and reach out to a freight broker instead.

When it comes to your own company, you can’t just choose between a freight broker or a 3PL. It’s about saving money and time while getting the best service out there.

The solution is to use freight re-distributors, 3PL services and distribution centers together which will result in tremendous savings when it comes down to shipping your inventory.

Many businesses deal in both private and public markets. However, basically all businesses are affected by distribution processes.

A small business owner may have some of these skills or functions within their team; but if not, then a 3PL (Third Party Logistics) provider is the solution for companies that want an emerging product fast to market.

Manufacturers often enlist a 3PL partner for distribution logistics to enhance their companies’ international delivery capacity or transport capacity through investment in a supply chain management or warehouse management systems.

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