Carrier, broker or 3PL: three different things sold under the same words

Four kinds of company, one kind of website

Search for LTL shipping companies and you will get four business models presented in near-identical language. Knowing which one you are talking to changes what you should ask, what you should expect, and who is on the hook when something goes wrong.

Asset-based carriers

They own the trucks, the terminals and the employees. Your freight moves on their network under their operating authority. They are directly liable for it, they set their own tariff, and their coverage map is their coverage map — outside it, they interline with another carrier or decline the lane.

Freight brokers

They arrange transportation without owning the equipment. In the United States a property broker must be licensed by the FMCSA and must hold a surety bond. A good broker adds real value: carrier selection, claim handling, and access to rates a small shipper would never see. The relationship is with the broker; the freight is on somebody else's truck.

3PLs

A broader arrangement that may include brokerage, warehousing, order fulfilment and managed transportation. For a shipper with volume this can be excellent. For a shipper with two pallets a month it is usually more contract than the situation calls for.

Freight marketplaces and intake platforms

Sites that collect shipment details and connect shippers with providers. This site is one of them, and says so plainly on the about page. A platform that does not move freight should never talk as though it does.

How to check who you are dealing with

This takes about five minutes and is worth doing before the first shipment rather than after the first problem.

• Ask for the legal entity name, the MC number and the DOT number, and check them on the FMCSA's public register rather than on the company's own site.
• Confirm whether the operating authority is for a motor carrier, a broker, or both. Both is legitimate and common; not knowing which one applies to your shipment is not.
• Ask who the freight will actually move with, and whether that will be disclosed before booking.
• Ask, in writing, how claims are handled and who files them.
• Ask what the cargo liability limit is for your commodity, not in general.

Where the difference actually bites: claims

Everything above is abstract until a pallet arrives with a corner staved in. Then the structure matters in a very practical way.

With an asset-based carrier, the claim goes to the carrier and the relationship is direct. With a broker, the claim generally goes through the broker to the underlying carrier — which can be smoother, because the broker knows the process and has leverage, or slower, because there is an extra party in the chain. What matters is that you know which it is before you need it.

In every case, the practical determinant is what was noted at delivery. Freight signed for clean is very hard to claim on afterwards. Note visible damage on the delivery receipt before signing, photograph it at the moment of delivery, and keep the packaging.

Questions worth asking before you book

1. Is this rate all-in, and which accessorials are already included?
2. What happens if the freight is reweighed or reclassed — will I be told before it is billed?
3. What is the transit standard on this lane, and is it a standard or a guarantee?
4. Who do I call on the day of pickup if nobody has arrived?
5. What is the cargo liability limit for this specific commodity?
6. If this is a recurring lane, does the rate hold, and for how long?

A provider who answers all six clearly is worth more than a provider who is ten percent cheaper and vague on four of them.

Frequently asked questions