Broker vs. 3PL?

You pretty much have it. If they are a 3PL then there is no "broker" agreement. There may be a contract(same as a shipper). Most handle all of the transportation,inventory control,pretty much all of the logistics.

 

Yes they can be a 3pl and broker at the same time. Most larger brokerages do both.

 

A 3PL(third party logistics) can operate as both. If they pay the invoice they operate as a broker. If the customer pays the invoice,they operate as a 3PL. Most 3PL's will answer the phone in the customers name,have onsite people,handle all RFQ'saudit freight bills before the customer pays them.

 

I thought the third party WAS the broker!

Parties 1 and 2 are the shipper and the carrier.

3pl just easier to type. Same fed authority. No legal distinction that I am aware of.



Same as the difference between a trucker and a commodity relocation worker.

I think y'all are wanting one to mean "in house" logistics provider as opposed to a old school broker providing logistics from his own office.

I hate the word 'logistics' and any company that uses it!

 

The best way to differentiate between the two is simple. A broker only moves some loads for a shipper. A 3PL moves all the loads for a shipper, with some exceptions.

 

As far as I can tell a 3PL is a broker, because the DOT requires them to be licensed as a broker. CHRobinson claims to be a "3PL" but they are listed as a broker on the DOT website, for example. Basically, if the entity isn't a shipper, receiver, or carrier, they must be a broker. The government isn't going to let companies simply invent a new business type because the government creates the rules of the game so that businesses don't screw themselves up, or screw others.

 

As a transportation purchaser you should remember that a 3PL is based in a service industry. Customer service should be the #1 priority from your transportation provider. If you're not getting great customer service, I would encourage you to look elsewhere. Great resource !