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As wholesale and manufacturing companies grow and expand, figuring out how to keep up with the number of shipments that need to be sent to customers domestically and abroad becomes increasingly challenging. Some larger companies choose to keep up by expanding their own in-house shipping function, but typically this requires a great deal of investment in logistics to bring in the human and other resources – skills and technology chief among them – needed to keep things running smoothly.

For some companies, this kind of investment is either impossible or undesirable. Smaller companies often cannot afford the resources to manage higher volumes of international and other complex shipping requirements. Other companies may simply prefer to keep their focus on the things they do best – building and selling great products – and leave the work of getting those products to their destinations to companies that specialize in these important business functions.

What’s a small or medium-sized manufacturer to do when they need to move products to countries or regions where they lack contacts and knowledge to manage the logistics process? Companies have several options for handling this situation: one of the most popular is freight forwarding.

Freight forwarding is a business arrangement in which a third party company arranges storage and shipping of merchandise on behalf of its customers.

If you read our article on third party logistics, you might be wondering the difference is between freight forwarding and 3PL. If so, you’re not alone: many in the logistics industry are asking themselves the same question. The services these types of companies provide are very similar, but the difference between the two tends to revolve around the breadth of services they provide and the costs involved.