Your product is performing well. You’re receiving rapid-fire orders and need to move faster. So how can your company satisfy the demand for your product? If you’ve asked yourself this question, it might be time to entrust your company’s shipping to a 3PL partner that can coordinate a freight-forwarding component. But with close similarities between these services and new transport technologies entering the market, it’s easy to get confused. Here are some answers to frequently asked questions regarding freight forwarding.
What is the difference between Freight Forwarding and Third Party Logistics (3PL)?
A 3PL company often cares for large sections of a company’s supply chain including the shipping of goods (1). The company may even provide warehousing, receive customer orders, supply custom labeling, accommodate the transport fleet and more.
Freight-forwarding is a more specialized role. Someone acts as an intermediary between the company that hires them and various transportation services responsible for getting their products to . . . customers including carriers, handlers and customs officials when required (2). Freight-forwarding companies don’t move freight themselves; they aim to connect clients with the most suitable and cost-effective shipping company that will move their goods nationally or internationally.
What can a freight forwarding service add to my business?
Meeting customer expectations is essential for the competitiveness of any company. Today, more than ever before, customers are expecting delivery times to be short and goods to arrive in perfect condition.
Many small to medium-sized businesses may initially handle shipping in-house. However, any business can increase the value and reputation of their company by taking a step forward and outsourcing to a freight forwarding company.
Freight forwarding companies focus solely on the work of fulfilling orders and ensuring that goods reach their destination safely and in good condition (3). Since this is their single focus, they can offer a better and more professional service than most small or startup companies. They have the experience and infrastructure to be able to meet customer expectations whether the shipment is national or international. They can also give back to their customers by increasing their own awareness about packaging and efficient transport methods that have a positive impact on the environment (4).
Can a freight forwarding company help to reduce company operating expenses?
Think for a moment of the range of work accomplished by a freight forwarding company. They select a trustworthy shipping company, arrange paperwork for customs, source suitable insurance and monitor the delivery closely to avoid external circumstances that can threaten timely delivery (1). These time-consuming tasks, that often require additional staff, are lifted from the company’s shoulders.
The savings resulting from lower labor costs can be reinvested into growing the company and developing its products, assured by the knowledge that its reputation is steadily improving because of good customer service. Further, savings can be passed on to the customer in the form of lower shipping rates, making them more likely to reorder the product.
Could an external freight forwarding company actually increase our internal efficiency?
Freight forwarding services help companies save money – but not by arranging shipments alone. It’s important to note that they bring with them trained staff that can pack fragile items, plan journeys through international shipping routes and deliver items, undamaged, in a punctual manner. Further to this, freight forwarding companies can leverage their weighty experience and purchasing power to negotiate lower rates for shipping and insurance. In a shipping world that is quickly changing shape with existing companies merging into alliances, specialist companies that do the research for you save valuable hours (4). Companies that make use of freight forwarding services can work more efficiently because they do not need to allot time for the research and procurement of these services.
Which company should I choose?
In short, the performance of the shipping companies will ultimately influence your reputation with stakeholders and customers. With so many excellent options available for the shipping of products, it is crucial that each business choose wisely.
Outsourcing this research to specialists in the shipping market can mean that your responsibilities are in safe hands. With your input, they will select safe and reputable shipping options with the latest technology to track your shipments from door-to-door. You will be assured that their efforts will enhance your name in the market and amongst customers.
Third party logistics may be used to care for several different aspects of the supply chain. Yet, employment of a 3PL that specifically includes freight forwarding makes sense for businesses of all sizes. Freight forwarding adds genuine value to their reputation as a reliable provider and reduces your labor along with the operational costs of caring for shipping in-house.
(1) https://www.inflowinventory.com/blog/small-business-3pl/
(2) https://www.thebalancesmb.com/freight-forwarding-2221040
(3) https://www.bifa.org/media/3777747/best-practice-for-environmental-management-and-environmental-policy.pdf
(4) https://www.forbes.com/sites/forbestechcouncil/2018/11/14/four-ways-logistics-will-change-in-2019/#1f6f26de3494