“3PL brokerage” is a term you may see used occasionally in logistics—searching for it is probably how you ended up here.
But did you know that, technically, a 3PL brokerage isn’t a real term used in the supply chain industry?
To clarify this, we asked a logistics pro—Tony Runyan, the Chief Client Officer at Red Stag Fulfillment—what a 3PL brokerage is.
Let’s dive deeper into this often-misunderstood phrase.
What do people mean when they say “3PL brokerage”?
A 3PL brokerage is a phrase that combines two separate concepts in the logistics industry: 3PLs (third-party logistics providers) and freight brokerages.
Let’s clarify the differences.
While the term isn’t industry-standard, the idea that you might be trying to convey with this term—a 3PL provider that also offers freight brokerage services—does actually exist.
For example, Red Stag Fulfillment is a 3PL partner that offers freight brokerage services. In addition to handling all aspects of order fulfillment and warehousing, we can simplify your freight logistics by arranging cost-effective transportation from your manufacturer to the port of origin, and from the port of destination to one of our warehouses.
Reach out today to learn how we can streamline your logistics and fulfillment operations.
What services are businesses looking for when they seek out a 3PL brokerage?
Let’s go over some of the services 3PLs and freight brokers offer that align with what someone looking for a 3PL brokerage may be looking for.
Order fulfillment and warehousing
The primary service people look for in a 3PL is order fulfillment. This process includes:
- Receiving products from your manufacturer
- Storing those products in a warehouse
- Picking and packing products into boxes as orders come in
- Coordinating with shipping carriers to load the orders onto trucks and send them to your customers
They may also provide specialized storage, such as temperature-controlled environments for medications or food products.
Inventory management
3PLs help manage your inventory, reducing shortages and ensuring adequate stock to meet customer demand. They alert you when items run low, preventing stockouts and customer dissatisfaction. Some 3PLs can align your inventory with demand to improve stock turnover and sell-through rates.
Carrier management
Both 3PLs and freight brokers maintain extensive carrier networks, but they typically serve different purposes in the supply chain.
Freight brokers manage a network of carriers focused on long-haul transportation. These carriers help move your products from factories to U.S. ports, or from ports to warehouses. Their network often includes:
- Ocean carriers for international shipping
- Long-haul truckers for domestic transportation
- Rail carriers for overland freight
3PLs, on the other hand, primarily work with carriers that handle the last mile of delivery—from the warehouse to the end customer. Their carrier network usually includes:
- FedEx, UPS, USPS, and DHL
- Regional last-mile carriers
Both 3PLs and freight brokers carefully vet their carriers, considering factors like safety records, timeliness, claim rates, and the type and age of vehicles and equipment. This ensures your products are handled by reliable transportation partners throughout the supply chain.
Logistics coordination
3PLs and freight brokers offer various logistics coordination activities:
- Route optimization and shipment tracking
- Managing each shipment from start to finish
- Arranging pickups and deliveries
- Providing in-transit updates
- Arranging recovery options for transportation issues
These services allow for efficient, cost-effective shipping and make it easier to address potential issues.
Rate negotiation
Both 3PLs and freight brokers leverage their volume to negotiate better rates with carriers, potentially reducing your shipping costs.
Administrative support
Shipping involves complex documentation. 3PLs can manage all of it, including bills of lading, customs paperwork, and invoicing. This saves you time and reduces administrative burdens that can distract you from core business activities.
They also help you tackle regulatory compliance. Different products have varying shipping regulations—especially food, medical devices, and hazardous materials. Experienced 3PLs understand these requirements and help your shipments meet them, avoiding delays, penalties, and legal issues.
Specialized services
Some 3PLs offer additional services such as:
- Kitting and assembly
- Handling of heavy and bulky items
- Processing customer returns (reverse logistics)
Find a comprehensive solution to your logistics challenges
While 3PLs and freight brokers offer distinct services, what many businesses truly need is a combination of both. You’re likely looking for a partner that can handle your entire logistics process, from factory to customer doorstep.
Some 3PLs, like Red Stag Fulfillment, offer this comprehensive solution. We combine traditional 3PL services with freight brokerage capabilities, providing a seamless logistics experience. Our essential services include:
- Managing transportation from port of origin to port of destination, and then to our warehouses
- Storing your inventory with specialized options for sensitive products
- Fulfilling orders with same-day processing and 2-day ground shipping to 96% of the U.S.
- Providing simple, affordable inventory management with zero shrinkage guarantee
- Offering ongoing support from experienced logistics professionals
This integrated approach allows you to work with a single partner for all your logistics needs, simplifying your supply chain and freeing up your time to focus on core business operations.
Ready to streamline your logistics operations? Reach out to Red Stag Fulfillment to discuss how we can tailor our comprehensive services to meet your specific needs.
