There are some significant differences between a carrier and a shipper. This article delves into the top five differences and their profound implications for your retail and eCommerce business.
In eCommerce fulfillment, “carrier” and “shipper” are pivotal concepts. A carrier refers to an entity responsible for delivering packages or freight, with notable players being FedEx, UPS, and USPS in the U.S. On the other hand, the shipper denotes the individual dispatching a package through a carrier. In your eCommerce venture, you assume the role of the shipper for order fulfillment. Thus, as an eCommerce shipper, you must acquaint yourself with fundamental shipping and logistics terminology, including carriers, manufacturers, drop shipping suppliers, and third-party logistics providers.
A Carrier and a Shipper
A carrier is an enterprise that moves commodities between different locations. These companies usually possess their vehicles and undertake tasks such as loading, unloading, and transporting the goods.
A shipper is an entity offering shipping services. Unlike carriers, shippers generally don’t possess their vehicles; however, they can engage carriers to move goods for them. Shippers handle packaging, labeling, and monitoring the goods’ progress.
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A shipping carrier offers delivery services for goods from a company or the shipper to customers. The owner of the goods is the shipper, and the recipient is the Consignee. These carriers, also called delivery carriers, are authorized to transport items between shippers and consignees.
The shipping carriers leverage varied transportation methods, such as the following:
Carrier vs. Shipper
The key distinction between carriers and shippers lies in vehicle ownership for shipping. Carrier firms usually have vehicle ownership, whereas shippers do not. Consequently, carriers manage loading, unloading, and transportation, whereas shippers handle packaging, labeling, and monitoring of goods.
Let’s look at some of the factors that differentiates a carrier and a shipper:
• Bill of Lading
It is a document issued by the carrier and contains crucial details essential for shipment. It includes information like destination, cargo type, and quantity. This bill lists the three key entities in freight shipping: carrier, shipper, and Consignee.
Due to its legal nature, the Bill of Lading holds immense importance in shipping. Its significance revolves around three primary functions. Firstly, it resembles a title, confirming ownership of the delivered goods. Additionally, it functions as a contract, documenting the carrier-shipper agreement for goods delivery.
• Ownership and Responsibility
When a consignee and shipper establish an arrangement, the shipper takes on the duty of delivering items to the Consignee. Failing to do so could result in refunding the Consignee, or there could be legal complications. However, it’s important to note that the shipper isn’t the exclusive party responsible for delivery.
After the shipper hands the goods to the carrier, the carrier assumes responsibility and ownership of the cargo. The carrier is typically accountable for covering these expenses if the cargo suffers damage, delay, or loss during transportation.
The terminology used for the entity supplying shipped goods can vary based on the country of origin or destination. In some cases, the shipper might be called the Consignor, and these terms are interchangeable, signifying the provider of the shipped items.
Nonetheless, it’s worth noting that the shipper or Consignor might differ from the seller. For instance, the seller could engage a distributor to assume the role of shipper or Consignor on their behalf.
The Bill of Lading enumerates the Consignee as the third involved party. This recipient is the designated recipient of the cargo. Although the Consignee often corresponds to the buyer, exceptions exist. In certain countries, the Consignee named in the Bill of Lading could be the buyer’s financial institution.
The cargo is exclusively released to the Consignee or a duly authorized delegate by default. If the Consignee intends to forward the cargo to a different entity, the Consignee designates this person or company as the “notify party.”
Impact of engaging a carrier or a shipper
Harnessing the capabilities of a carrier or shipper offers a multitude of advantages for seamless logistics. Explore how these entities can enhance your business operations, from efficient transportation to expert handling.
Let’s look at some of the benefits:
Employing a carrier grants you access to their fleet of vehicles, which proves advantageous when you lack transportation resources or the means to convey your goods independently.
When utilizing a shipper, they assume responsibility for your packaging needs, which proves advantageous if you’re constrained by time or resources to package your goods yourself.
Opting for a shipper entails them handling the labeling of your goods, a convenience if you lack the time or resources to manage this task yourself.
Engaging a shipper involves them overseeing the tracking of your goods, a valuable advantage if you’re short on time or resources to manage the tracking process personally.
Numerous advantages come with utilizing carriers or shippers. Opting between the two depends on your specific requirements. Should transportation be your need, a carrier is the solution. A shipper is essential if comprehensive services like packaging, labeling, and tracking are necessary. When uncertain, seeking advice from a shipping professional is wise. They’ll assist in evaluating your needs and selecting the most suitable choice for your circumstances.
So, select the service provider based on your requirement. However, the smart move is to hire a 3PL provider, experienced in serving as both.
XPDEL helps eCommerce brands accelerate their growth, empowering them with multi-channel fulfillment, whether shipping directly to consumers, delivering to businesses, or selling through retail stores. We are founded and operated by veterans with experience from Amazon, FedEx, UPS, JDA, Walmart, Target, and other leading companies in eCommerce and Retail. Guided by these experts, we provide customer experiences that help you grow your business.