Carrier and shipper are the key terms in the execution of e-commerce, specifically, and the supply chain in general. Nearly every business, whether self-operated, small enterprises, or those in the learning phase, wonders about the differences between carriers and shippers. Here is Worldcraft Logistics' guide on the definitions, distinct roles of carriers vs shippers, along with tips to enhance your e-commerce transportation operations.

1. Shipper vs Carrier Definition

1.1 What is a shipper?

A shipper is the supplier involved in a commercial transaction. For example, a shipper could be an individual responsible for sending essential components to your business for integration into your production processes. Traditionally, shippers undertake the preparation of goods for shipment and pack them securely in an approved container.

While shippers and sellers may be synonymous in certain cases, this is not universally true. Some businesses, particularly smaller ones, might engage with a distributor or fulfillment center. In such cases, the fulfillment center assumes the responsibilities of packaging and shipping services on behalf of the actual seller.

1.2 What is a carrier?

Once goods are prepared for shipping, they are handed over to the carrier. A carrier is an entity entrusted with delivering the products to the buyer or consignee. Carriers employ various transportation methods, including planes, ocean freight, and truck lines, to ensure the delivery of products. Examples of carriers encompass entities such as Uber Freight, USPS, and UPS.

2. Compare details between shippers and carriers

2.1 Bill of Lading

The bill of lading, issued by the carrier, is a crucial document in the freight shipping process. It contains vital information necessary for transportation, including destination, quantity, and type of cargo. This legal document serves three key purposes: confirming ownership of goods, documenting the agreement between the carrier and shipper, and acting as a receipt, verifying that the carrier has taken possession of the freight from the shipper.

2.2 Liability and Ownership

Upon transferring freight to the carrier, the shipper's responsibility for delivering goods to the consignee diminishes. The carrier then assumes liability and ownership of the cargo. If any damage, delay, or loss occurs during transit, the carrier is typically responsible for bearing these associated costs.

2.3 Consignor

The term "consignor" may be used interchangeably with "shipper," depending on the country of origin or delivery. Both terms refer to the entity supplying the shipped commodities. However, the shipper or consignor may not be the same entity as the seller, as the seller might engage a distributor to act on their behalf in shipping.

2.4 Consignee

The consignee, listed as the third entity on the bill of lading, is the party to whom the cargo is allocated or consigned. While the consignee is typically the buyer, exceptions exist. In some countries, the consignee listed on the bill of lading might be the buyer's financial institution. Freight is usually released only to the consignee or an authorized representative, and if delivery is intended for another entity, this individual or company is designated as the "notify party" by the consignee.

3. Flexible carrier or shipper selection

When eCommerce shippers independently manage their relationships with carriers, they often opt for a business account with a single carrier and channel all their packages through that specific service. The rationale behind this approach is to qualify for volume discounts, making it a practical choice.

However, it's worth noting that each carrier possesses distinct strengths and weaknesses concerning particular delivery zones and package types. For instance, one package might be more cost-effective through UPS, while another could reach its destination a day earlier via FedEx. Collaborating with a third-party logistics provider (3PL) such as Red Stag Fulfillment offers the advantage of flexible carrier selection. As a high-volume shipper engaged with major carriers, we can strategically determine the optimal carrier for each of your orders. This not only results in cost savings but also contributes to reducing delivery times, providing a more efficient and tailored shipping solution for your business.

4. Overview of e-commerce shipping terms you should know

As an eCommerce shipper, you may encounter unfamiliar terms while collaborating with carriers, manufacturers, dropshipping suppliers, and third-party logistics providers. To assist you in understanding the distinctions between carriers and shippers, as well as other relevant terms, here's a glossary for your reference.

• The consignor, also known as the shipper, is the individual responsible for packing, shipping, and covering the shipping costs for a package or freight shipment. This term is often used in international shipping, whereas "shipper" is more commonly used for domestic packages. The consignor may be the seller, manufacturer, or a distribution company handling goods for shipment.
• The consignee is the party receiving a shipment or package. This could be an individual awaiting a delivery or an importer accepting goods at the border, responsible for duties and tariffs. While "consignee" is frequently used in international shipping and importing, it generally refers to any party agreeing to receive goods ordered online. The shipper and carrier ensure the items reach the consignee in the promised condition.
• A bill of lading is a legal document issued by the carrier, detailing the contents and destination of a shipment. It includes information on hazardous materials or special handling requirements. This document serves as a contract, specifying ownership transfer from the consignor to the consignee and outlining conditions such as transit times and costs.
• A freight forwarder is a service provider coordinating and scheduling freight shipping for eCommerce companies. They facilitate FCL (full-container load) or LCL (less-than-container load) shipments by sea, rail, or truck. Leveraging their relationships with freight companies, forwarders can often negotiate better rates or faster transport than individual businesses.
• A freight carrier transports freight shipments between supply chain nodes. This includes trucking, rail, and ocean shipping companies.
• FTL refers to a shipment where a single consignor fills the entire truck or container. In the case of FCL (full-container load), a single consignor utilizes the entire container for sea, rail, or truck transport.
• LTL shipments involve single or multiple pallets of goods within a truck carrying products for multiple merchants. It is commonly used to ship wholesale goods to a 3PL or distributor. In eCommerce, residential LTL freight is effective for delivering oversized products like furniture to online shoppers. LCL (less-than-container load) is a similar concept, often associated with ocean freight.
• An ASN is a form provided to a warehouse, informing them of the expected contents and arrival time of an incoming shipment. ASNs enable fulfillment providers to efficiently unload and check incoming stock for discrepancies.