Freight forwarders and 3PLs both work in logistics, and many businesses use the two terms interchangeably. They do different jobs, though. A freight forwarder arranges the movement of your goods from one place to another; a 3PL stores your goods and handles your orders once they arrive. This guide explains the difference, when you need each one and how they work together.
Freight forwarder vs 3PL at a glance
| Freight forwarder | 3PL (third-party logistics) | |
|---|---|---|
| Main job | Moves goods between countries or cities | Stores goods and fulfills orders |
| Typical services | Booking air, ocean and truck space, export and import paperwork, coordinating customs brokers | Receiving, warehousing, pick and pack, shipping orders, returns, kitting, marketplace prep |
| Owns a warehouse? | Often not, or only for short-term consolidation | Yes, inventory is stored there |
| Paid for | Each shipment | Storage, handling and each order |
| Relationship | Per shipment or per lane | Ongoing, often under a contract with service levels |
What a freight forwarder does
- Books space with airlines, shipping lines and trucking companies
- Consolidates smaller shipments into containers (LCL) or full loads
- Prepares export documents and coordinates with customs brokers
- Tracks the shipment from pick-up to final delivery point
What a 3PL does
- Receives and counts your inventory when it arrives
- Stores it on pallets, shelves or in bins
- Picks, packs and ships customer and wholesale orders
- Prepares stock for Amazon FBA or Walmart WFS
- Processes returns and reports inventory levels
New to the term? Read what is 3PL logistics.
When you need each one
| Situation | Who you need |
|---|---|
| Importing a container from overseas to sell in Canada | A forwarder to bring it in, and a 3PL to store and ship it |
| Shipping finished orders to online customers | A 3PL |
| Moving a one-off shipment between countries, no storage needed | A forwarder |
| Selling on Amazon.ca or Walmart.ca with stock from abroad | A forwarder for the import, a 3PL for prep and replenishment |
| A forwarder looking for warehousing for a client | A 3PL in the destination country |
How they work together
- Your supplier hands the goods to the freight forwarder.
- The forwarder ships them by air or ocean and arranges customs clearance through a broker.
- The goods are delivered to the 3PL warehouse, which receives and counts them.
- The 3PL stores the inventory and ships orders to your customers.
Many forwarders also send their clients to a 3PL when goods need storage in Canada. We regularly receive quote requests from forwarders in the US and Europe on behalf of their clients.
Warehousing in Canada for forwarders and importers
Newsom 3PL receives international shipments at our Mississauga warehouse near Toronto Pearson, then stores and ships them across Canada and worldwide. We also handle ocean freight, air freight and cross-docking. Compare your options in our guide to international shipping from Mississauga, or request a quote.
Frequently asked questions
Is a freight forwarder a 3PL?
Not usually. A forwarder arranges transport, while a 3PL stores goods and fulfills orders. Some companies offer both, so ask what each provider actually does in-house.
Do I need a customs broker as well?
Usually yes for commercial imports. Many forwarders work with a broker for you, but the importer of record is still responsible for duties and taxes.
Can a 3PL receive a container from my forwarder?
Yes. The 3PL books a delivery appointment, unloads the container, counts the goods and puts them away.
What information does a 3PL need from a forwarder?
The commodity, number of pallets or cartons with size and weight, the arrival date, who is importer of record and what happens to the goods after storage.