Carrier and shipper are key terms in eCommerce fulfillment that every online business should know. Here’s our guide to the difference between a carrier and a shipper, along with tips to improve your eCommerce shipping.
What’s a carrier vs. a shipper?
A carrier is a company that delivers packages or freight (or both). The major package delivery carriers in the U.S. are FedEx, UPS, and USPS. The shipper is the person who sends a package via a carrier. In your eCommerce business, you are the shipper for your order fulfillment.
Terms every eCommerce shipper should know
As an eCommerce shipper, you may hear some unfamiliar terms as you work with carriers, manufacturers, dropshipping suppliers, and third-party logistics providers. Here’s a glossary to help you navigate carrier vs. shipper and everything in between.
Consignor
The consignor is the person who packs and ships a package or freight shipment and pays for shipping. A consignor is the same as the shipper. Sometimes the seller or manufacturer is the consignor, but a distribution company can also consign goods for shipment.
The term consignor is generally used in international shipping. Shipper is a more common term for domestic packages.
Consignee
The consignee is the person receiving a shipment or package. That might be an individual receiving an order delivery or an importer who accepts goods at the border and pays the duties and tariffs due. Like consignor, this term is more commonly used in international shipping and importing.
A consignee is a party that agrees to receive goods from a shipper, for instance by placing an order online. The shipper and carrier are responsible for getting the items to the consignee in the promised condition.
Bill of lading
The carrier issues a bill of lading, a legal document that outlines the items included and the destination. Other information on the bill of lading may include whether it contains hazardous materials or requires special handling. The bill of lading defines who owns the goods and when ownership transfers from the consignor (shipper) to the consignee and states that the carrier has the right to transport goods on behalf of the shipper. The document serves as a contract detailing the conditions for the shipment, such as transit times and costs.
Freight forwarder
A freight forwarder is a service provider that can coordinate and schedule freight shipping for your eCommerce company. Freight forwarders can help you secure FCL (full-container load) or LCL (less-than-container load) space and move those containers by ship, rail, and truck. Because of their relationships with freight companies, forwarders can often negotiate faster transport or better rates than you could get on your own.
Freight carrier
A freight carrier transports freight shipments from one supply chain node to another. Trucking, rail, and ocean shipping companies are all freight carriers.
Full-truckload freight
Full truckload (FTL) is a shipment where one company consigns for and fills the entire truck. A full container load (FCL) means a single consignor is using the whole container, which may travel by sea, rail, or truck.
Less-than-truckload freight
Less-than-truckload (LTL) shipments are single or multiple pallets of goods within a truck carrying products for several merchants. Companies can use LTL freight to ship wholesale goods to a 3PL or distributor. In eCommerce, residential LTL freight is an excellent method for delivering oversized products, such as furniture, to online shoppers. Similarly, LCL is less-than-container load freight, often shipped by ocean freight.
Advance shipping notice (ASN)
An advance shipping notice (ASN) is a form you provide a warehouse to let them know exactly what you expect in an incoming shipment and when it will arrive. ASNs allow fulfillment providers to unload inbound stock and check the shipment for discrepancies quickly.
Common carriers in the U.S.
The major U.S. carriers handle most eCommerce shipping needs. In addition to package delivery, they also have divisions that transport LTL and FTL freight. The carriers generally offer a range of other services, including overnight delivery and international shipping services for exporters.
The major U.S. carriers are:
- FedEx
- UPS
- USPS
Another option is DHL. The German delivery company has long been a leader in international shipping, particularly to Europe, and now has a growing presence in U.S. domestic shipping.
Flexible carrier selection
When eCommerce shippers manage their own carrier relationships, they often get a business account with a single carrier and send all their packages through that service. To qualify for volume discounts, using a single delivery company is a logical choice.
However, each carrier has strengths and weaknesses in certain delivery zones and for certain packages. You might find that one package is cheaper via UPS while another will arrive a day sooner by FedEx. When you work with a 3PL like Red Stag Fulfillment, you get the benefit of flexible carrier selection. Since we are a volume shipper with all the major carriers, we can determine the best carrier for each of your orders, saving you money and reducing your delivery times.
The 3PL difference
Flexible carrier selection is just one benefit that eCommerce shippers get from outsourcing their fulfillment. Here are some of the other ways a 3PL can improve your eCommerce shipping.
Shipping zones
Shipping zones correspond (approximately) to the distance from the origin of a package to its destination. Carriers set prices based on shipping zones; the higher the zone, the greater the cost to ship a package. The zones also correlate to delivery times, with higher zones meaning more days in transit.
The closer your fulfillment centers are to your end customers, the fewer shipping zones your orders will cross. When you outsource your fulfillment, you get to ship your orders from warehouses that can reach your customers more quickly. For example, Red Stag Fulfillment’s warehouse locations in Tennessee and Utah can ship to 96% of U.S. addresses in two days or less.
Dimensional weight
Dimensional weight is “weight” calculation based on the size of the box. Carriers charge for the actual weight OR the dimensional weight, whichever is greater. It’s a method to compensate for the truck space required for oversized packages. It’s a benefit to the carrier vs. the shipper, who has to pay extra.
Working with a 3PL experienced in oversized shipping can help you find ways to reduce dimensional weight surcharges. For instance, Red Stag Fulfillment helps our clients understand when package consolidation can save money by shipping small accessories in the same box as a large product.
Shipping discounts
A 3PL is a high-volume shipper, sending packages for many clients, and that can entitle it to greater shipping discounts than you could negotiate for your business. At Red Stag Fulfillment, we ship millions of packages every year and can pass on favorable shipping rates to our clients.
Red Stag Fulfillment helps eCommerce businesses optimize their supply chains
Red Stag Fulfillment can help you understand how to work better with carriers and become a more effective shipper. We are proud to offer accurate, efficient warehousing, pick and pack, and shipping services that support the growth of eCommerce enterprises. When you’re ready to take your business to the next level, reach out to Red Stag.
More about carriers and shippers:
- What Is Standard Shipping?
- What Is Shipping Insurance and Do I Need It?
- How to Choose the Best Carrier for Domestic Shipping
