Broker vs. 3PL?

I have laughed at brokers that do nothing but broker and couldn't dream of every providing any service outside of brokering calling themselves a 3PL. But technically they are providing a service that falls under this label.

But what the customer thinks is a 3PL is a bit different.

Ryder would be a great example. They have many accounts that they provide everything from the software, warehouse, workers, trucks, drivers, etc. Once a product is finished being made and put on a shelf, a Ryder employee takes if from there.

 

Thanks wichris

 

3PL is a meaningless term that covers way too many things. A lot of you guys are thinking of 4PL's when you talk about what a 'real' 3PL looks like. 3PL's include brokers, SCM companies, 3rd party warehouses, and a great many things I can't think of now. All freight brokers are technically 3PL's but not all 3PL's are freight brokers. One is a smaller category of the larger group.

Some of the bigger 3PL's do everything for some of their customers... Most of these operations actually stitch together a whole network of different 3PL's to get the freight moved. They'll do the part that they actually specialize in, but the rest of it will get outsourced to other 3PL's. This becomes the norm in international logistics where the customer would have some pretty serious barriers to entry.

 

I think some of you are confusing dedicated logistics with simple brokerage. Both are 3pl because as someone stated in an earlier reply, the shipper and receiver are 2 parties and the broker is the 3rd. Just a fancy name some college educated ####### came up with.

 

A broker is a small company probably ran out of the basement of their mom's house who buys loads off a load board and sells them to carriers for less and really adds zero value to any situation.

A 3PL like CHR for instance is a company who has contracts with customers that can range from managing every aspect of their logistical needs all the way down to just procuring capacity for them depending on the customers needs. Sure CHR is straight up covering loads for some customers who don't wish to or cannot do it themselves. But that is not how they make $12B/year. They do that by handling every aspect of some of the worlds largest businesses logistical needs. Through that relationship they in-turn bring freight to the table for trucking companies big and small that would never have a chance of landing that business on their own. So, love em or hate em NO trucking company whether it be a OO or Swift has the ability to fulfill those customers need for total logistical partner world wide.

 

It's referred to as 3PL because we neither own the Truck, Airplane, Ship, or Train that in the end transports the shipment nor do we own the Freight being transported. We are the 3rd party that brings to the table the knowledge, the capital, the relationships, the technology, and the man power to solve the worlds supply chain problems.

 

My understanding is that a 3PL (third party logistics) provider is a broker or brokerage which has taken on the role of traffic manager for a shipper. Because they have a contract with the shipper they actually cost the shipper more than if the shipper dealt with an independent broker. Because the 3PL has a contract with the shipper they have an interest in the freight and therefor take on a 100% motor carrier liability in the event of damage or loss. Since the independent broker is only arranging a contract for transportation between the shipper and the transporter the independent broker is only liable for their BOL.

 

You make it sound as though only big brokers are 3PL's. Big brokers don't have a lock on these things. There are plenty of well rounded small carriers in the 100-200 trucks range or even smaller, not to mention some of the bigger ones and megas who do the same exact things a non-asset 3PL does. They have their own sales people. Provide complete supply chain solutions with actual transportation and warehousing assets of their own, their own brokerage. Non-asset brokers seem to enjoy perpetuating the myth that the world would fall to pieces without them. To be sure there's lots of people who depend on them, myself included. But you're not the end all be all. You can be replaced.

 

Ok im 3PL out

 

Shouldn’t the Truck be the 3rd Party? Natural order of things.Im. Sure it got coined by Ryder or Some other warehouse outfit. I’ve always seen the description Non asset holding 3rd Party Logistics Provider.Fancy name for Brokerage that doesn’t own anything . Arguably the Large Logistic warehouse operations better fit the description.However if they want to flip Freight they need Broker Authority