Carriers, shippers, and freight forwarders all transport goods, but the terms aren't interchangeable. Understanding the differences allows you to better manage your organization's logistics processes.
What Is a Carrier?
A carrier is a company that physically moves your goods for you. It maintains a fleet of vehicles that transport products, including trucks, aircraft, and ships. Carriers might specialize in one type of transport for your products and packages, such as over-the-road or air transport.
When to Use a Carrier
Your company needs a carrier when your goods or products must be moved from your facility to another location. If you only deliver your goods locally, you might have a delivery vehicle you use. However, if you ship to other states or countries, you likely need a carrier to move those items.
What Is a Shipper?
The shipper is the individual, company, or organization that prepares and sends goods via a carrier. A company that manufactures a product and ships it could be a shipper. However, someone can also oversee a company's goods as the items are prepared for transport. Companies sometimes use separate shippers to prepare and package goods for shipment rather than taking on that responsibility.
When to Use a Shipper
Whether you act as your company's shipper or outsource the task depends on your organization's size and shipping volume. Using a shipper can be beneficial for large volumes of products going out the door. You might use a shipper if you experience a sudden increase in business and need time to scale your internal procedures to keep up with shipments.
What Is a Freight Forwarder?
A freight forwarder is a separate company that handles the logistics between shippers and carriers. They don't physically move the products or own transport vehicles. Think of a freight forwarder as a broker to help shippers find the best carriers to move their shipments. They also handle the administrative side of shipping goods, including negotiating rates with carriers and handling the necessary documentation.
When to Use a Freight Forwarder
You can work with a freight forwarder if you have complex shipping needs, such as products going overseas or shipments that need to use different types of carriers. Working with a freight forwarder can save your company time because you don't have to check with multiple carriers to compare rates. In some situations, you might get better rates because of the forwarder's power due to the large volume of shipments it handles.
Key Differences Between Carriers, Shippers, and Forwarders
The main difference between carriers, shippers, and forwarders is their specific roles within the transportation process. Shippers take care of tasks before the products move so they're prepared for shipment. Freight forwarders are also involved early in the process to help you choose a carrier. The carrier is the last step in the process, handling the actual movement of the goods.
The way each company interacts with your goods also varies. A shipper might prep and package items before they're shipped. This role is important in protecting the items and ensuring they're ready for transport. Carriers take possession of your goods and manage them until they're delivered. They're responsible for keeping those items safe during this time. Freight forwarders are less likely to have physical contact with your shipments. They focus more on logistics and helping organize transport. Some freight forwarders offer warehousing services and store shipments for customers, which may give them temporary physical control over your items.
Choose Your Best Option
With a clear understanding of how carriers, shippers, and freight forwarders differ, you can choose the services that benefit your company. Working with one or more companies could save your business time and money.
