3PLs and freight forwarders serve different functions in your supply chain, but many business owners and ecommerce entrepreneurs often confuse what each one does.
A third-party logistics provider (3PL) manages warehousing, inventory, order fulfillment, and shipping to your customers. A freight forwarder specializes in coordinating the transport of your goods between locations, typically across international borders.
Some 3PLs also offer freight forwarding services or partner with freight forwarders to provide end-to-end solutions. This integration can streamline your logistics by giving you a single point of contact for both international shipping and order fulfillment.
If you run a growing business, you’ll likely need both services—whether from separate providers or a comprehensive 3PL with freight forwarding capabilities.
This guide breaks down the specific functions, key differences, and use cases for 3PLs and freight forwarders, helping you understand how each fits into your logistics strategy.
TL;DR:
Key takeaways
3PLs provide end-to-end logistics management, including warehousing, inventory, picking/packing, and returns.
Freight forwarders focus specifically on coordinating transport between two points, typically across borders.
3PLs are typically asset-based, owning/renting warehouses, tools, and infrastructure.
Freight forwarders rarely own significant logistics assets and act mainly as intermediaries.
3PL vs. freight forwarder (Quick summary)
| A 3PL is a fit if… | A freight forwarder is a fit if… |
|---|---|
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Do you need a 3PL or a freight forwarder?
| 3PL | Freight Forwarder | |
|---|---|---|
| Core Service | End-to-end management of the logistics operation: warehousing, inventory, picking and packing, kitting, shipping, and managing returns (reverse logistics) | Coordinating freight transport between two points, typically across borders: finding shippers, negotiating rates, optimizing paths, preparing import/export paperwork, etc. |
| Key Strength | Order fulfillment and product warehousing | International bulk transport |
| Best Suited For | Ecommerce, retail, and growing brands. | Import-export businesses with predictable needs for bulk shipping |
3PL vs. freight forwarder: Diving deeper
What is a 3PL?
A third-party logistics company (3PL for short) is a service provider that helps companies optimize the supply chain and logistics operations.
The scope of services typically includes warehousing, inventory management, order fulfillment, processing returns, and shipping.
In simple terms, once you have the product, a good 3PL partner will handle the rest.
A 3PL company is typically asset-based. That means the company owns or rents the space, tools, and infrastructure needed.
Example of a 3PL fulfillment process
For the purposes of this guide, let’s say you’re selling lamps online.
3PL service steps:
01
You buy/make the lamps.
02
The lamps are transported to your 3PL partner’s warehouse.
03
The 3PL company receives the goods.
04
They make an inventory and warehouse the lamps.
05
You integrate your chosen sales platform(s) into the 3PL’s workflow, so the orders go directly to them.
06
The order comes in.
07
The lamp is picked and packed by the 3PL.
08
The package is shipped on the same day or the day after, depending on the order time and the 3PL’s policy for same-day shipping.
09
Your lamp is delivered to the buyer.
What is a freight forwarder?
A freight forwarder is a provider of logistics services with a singular focus–moving the product between two points, typically internationally.
They organize, coordinate, and optimize transport by any mode necessary–ocean, air, road, and/or rail.
The transport is typically multimodal (combines different modes).
The company rarely owns significant logistics assets (e.g., trucks, warehouses) and almost never moves the goods directly.
A freight forwarder acts as an intermediary between the shipper and the carrier. They’re experts in international shipping and import/export.
Example of a freight-forwarding transport
We’ll use the lamp example again.
Let’s say you’re an ecommerce store importing from China.
You hire a freight forwarder to move the lamps to the U.S.
Freight forwarder service steps:
01
You order the lamps from the manufacturer.
02
You contact the freight forwarder and give them the details.
For example, “I need 1,000 lamps transported from Guzhen, China, to LA within 30 days. My budget is $3,000.”
03
The freight forwarder finds potential paths for your shipment. They mix and match transport modes and carriers to optimize for speed and cost.
04
They present you with the options based on your needs and budget, and you reach an agreement.
05
You use the freight forwarder’s platform to submit the end address in the U.S.
06
Your manufacturer uses the freight forwarder’s platform to set up the pickup.
07
The forwarder handles the paperwork, tracks the shipment, and coordinates with the carriers.
08
The lamps are shipped from Guzhen and travel via any mode necessary. A complicated move like this will be multimodal–a combination of truck, ship, rail, etc.
09
The shipments get to U.S. soil, and the import papers (previously prepared by the freight forwarder) are processed.
10
The lamps arrive at your destination in LA.
NOTE: The steps above are simplified. After all, that’s the point of hiring a freight forwarder–simplicity. You don’t have to worry about the sub-steps: the customs brokers, booking ocean lanes, import/export documentation, etc.
To learn more, see our guide on whether freight forwarding is right for you.
We used Guzhen and LA as examples to illustrate the freight forwarder’s role. An experienced freight forwarder would already have a simple transport path in mind, and would help you schedule these legs of the journey:
01
A truck from Guzhen to Guangzhou port.
02
Ocean freight from Guangzhou to the Port of Long Beach.
03
Truck from Long Beach to LA.
BOTTOM LINE: The freight forwarder is responsible for all parts of that transport process on both ends–from the manufacturer to the carriers in China and onward to you in the U.S.
Unlike a 3PL, they’re not involved in getting the product to the person who buys it on your site.
Need a trustworthy 3PL partner?
If your takeaway is that you need a 3PL provider, that’s half of the problem solved.
The other half is choosing a trustworthy partner.
At Red Stag Fulfillment, we’ve built our 3PL services specifically for ecommerce businesses that need reliable fulfillment partners. We understand the challenges of coordinating international shipping and domestic fulfillment, and we can even handle your freight after it reaches the port through our domestic freight management service.
For businesses importing products, we maintain relationships with trusted freight forwarders and can help coordinate your international shipping needs alongside our fulfillment services.
Learn more about our 3PL services today.
