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Advantages of Choosing a 3PL Over a Freight Broker

Deciding between outsourcing logistics to a third-party logistics (3PL) provider compared to using a freight broker is an important strategic choice. While both offer valuable services to streamline transportation management, there are notable differences between the two partners. 

When evaluating the pros and cons of using a 3PL versus a freight broker, shippers should consider several key factors. The expertise, technology solutions, capacity control, and cost structures vary between the two models. This article will explore the core benefits of partnering with a 3PL compared to a broker to help you decide better when choosing a logistics partner.

What is a Third-Party Logistics Provider (3PL)?

A third-party logistics (3PL) provider is a company that provides outsourced logistics services to businesses. 3PLs typically specialize in integrated warehousing, transportation, and freight services. Unlike a typical freight broker, a 3PL generally takes on a more active role in managing and optimizing a company’s supply chain and logistics operations. 

What Responsibilities Does a 3PL Have?

A 3PL provider can manage all or a portion of a company’s supply chain and logistics functions. Common services include:

  • Transportation management: Selecting carriers, negotiating rates, booking shipments, tracking freight, and auditing carrier invoices
  • Warehousing and fulfillment: Providing warehousing space, inventory management, picking/packing orders, and shipping
  • Technology: Providing a transportation management system (TMS) and logistics visibility tools 
  • Logistics consulting: Conducting supply chain analysis and providing expertise to optimize logistics networks
  • Freight bill auditing: Auditing carrier invoices for billing errors and overcharges
  • Sustainability services: Helping reduce carbon emissions from shipping and logistics.

Explore a comprehensive guide to the benefits and services offered by Third-Party Logistics (3PL) providers, gaining insights into why choosing a 3PL over a freight broker can enhance efficiency and streamline your supply chain operations for improved business performance.

Advantages of Using a 3PL

  1. Enhanced Efficiency in the Supply Chain: 

By leveraging the expertise and technology of a 3PL, shippers can improve efficiency in their supply chain operations. 3PLs have experience optimizing logistics networks, leading to reduced costs and faster delivery times.

  1. Enhanced Analysis of Transportation Expenditure:

3PLs have the data, analytics capabilities, and industry benchmarking to gain deep visibility into transportation spend. This allows shippers to identify opportunities for improvement and cost savings.

  1. Time Saved for Other Priority Tasks:

Outsourcing logistics to a 3PL reduces the workload for internal staff, allowing them to focus their time on core competencies rather than logistics administration.

  1. Addition of Transportation Experts to Your Team: 

A 3PL provides a shipper with experienced logistics staff without having to hire this expertise directly. The 3PL’s personnel become an extension of the shipper’s team.

Disadvantages of Using a 3PL

  1. Acquiring Supply Chain Management Can Be Challenging: 

Transitioning logistics operations to a 3PL partner requires close collaboration to ensure the provider fully understands the shipper’s requirements and business objectives. There is a learning curve.

  1. Several Shippers Rely Heavily on Their 3PL Provider:

Over-reliance on a single 3PL could make a shipper vulnerable if there are disruptions to the 3PL’s operations or the partnership sours. Maintaining contingency plans is wise.

  1. Implementation and Transition Expenses:

There are costs associated with transitioning logistics operations to a 3PL as systems and processes are integrated. Ongoing fees for 3PL services can also cut into potential savings from their expertise.

Understand the differences between fulfillment services and supply chain management, and discover how leveraging the advantages of Third-Party Logistics (3PL) providers over freight brokers can optimize your fulfillment processes, leading to cost savings, faster delivery times, and enhanced customer satisfaction.

What is a Freight Broker?

A freight brokerage is a company that arranges shipments between businesses that need to transport goods and the carriers that provide transportation services. They serve as intermediaries connecting shippers and carriers.

What Responsibilities Does a Freight Brokerage Have?

A freight broker can manage a company’s freight transportation needs, providing services that include:

  • Finding reliable carriers to haul freight loads
  • Negotiating rates between shippers and carriers
  • Managing freight transportation arrangements and scheduling
  • Tracking shipments and monitoring on-time performance
  • Providing additional logistics services as needed

Advantages of Using a Freight Broker 

  1. The Savings Achieved by Partnering with a Broker:

Brokers leverage their shipping volumes to secure favorable discounts from carriers, which they can pass on to customers. This results in significant cost savings.

  1. The Convenience Provided by Freight Brokerage:

Freight brokers handle all the carrier management and coordination, providing a convenient, one-stop shipping solution. 

  1. The Flexibility Offered by Freight Brokers:

Brokers have connections with multiple carriers allowing them to switch carriers or modes to meet changing customer needs.

Disadvantages of Using a Freight Brokerage

  1. Freight Brokers Cannot Guarantee Truck Availability:

Brokers have less control compared to asset-based 3PLs in guaranteeing capacity.

  1. Choosing the Appropriate Broker Can Pose Challenges:

Vetting and selecting the right broker that is reliable and provides competitive rates requires diligence.

Delve into the concept of pending remote fulfillment and its implications for supply chain efficiency, gaining valuable insights into why opting for Third-Party Logistics (3PL) services instead of relying solely on freight brokers can offer greater flexibility, scalability, and responsiveness to meet evolving customer demands and market trends.

Similarities in 3PL Providers and Freight Brokers

Both 3PLs and brokers act as partners in arranging transportation. Both leverage relationships with carriers and technology to optimize the shipping process. The main difference is that 3PLs offer more services, including warehousing and end-to-end supply chain management. While 3PLs and freight brokers have some key differences in their service offerings, there are similarities in the partnership and resources they provide:

  1. Both act as liaisons between shippers and carriers, removing the need for shippers to secure carriers directly.
  2. Both leverage connections with reliable carriers and transportation networks.
  3. Both utilize technology for optimizing loads, managing shipments, and providing visibility. 
  4. Both aim to reduce transportation costs for shippers through carrier negotiations.
  5. Both provide expertise in freight transportation and management. 

Discover the significance of Cost Per Order (CPO) in logistics and supply chain management, and learn how partnering with Third-Party Logistics (3PL) providers rather than freight brokers can help optimize your CPO through improved efficiency, reduced overhead costs, and enhanced order fulfillment capabilities, ultimately driving greater profitability and business success.


Deciding between a 3PL and a freight broker depends on the specific needs of a shipper. 3PLs provide a wider range of supply chain solutions including warehousing and fulfillment services under one roof. Freight brokers have a more limited scope focused solely on securing carriers and arranging freight movement. Companies that want to outsource supply chain operations fully may benefit more from a 3PL. Those focused purely on coordinating freight transportation may find a broker that meets their requirements. However, companies that want end-to-end supply chain management and logistics expertise may find the expanded services of a 3PL provide greater strategic value.


What is the main difference between a 3PL and a freight broker?

The key difference is in the scope of services. 3PLs offer integrated supply chain management, including warehousing and fulfillment, while brokers focus specifically on freight management.

What types of technology do 3PLs and brokers provide?

Both utilize transportation management systems and load-planning software to optimize loads and shipping routes. They provide online portals and visibility tools to track shipments.

How much can I save using a 3PL or broker?

Savings vary based on your current costs and volumes, but most companies save 10-25% on freight spend by partnering with a 3PL or qualified broker.

What are some key benefits of partnering with a 3PL?

3PLs provide greater supply chain visibility through advanced TMS technology and real-time tracking. Their logistics expertise can help identify and implement ongoing optimizations to your fulfillment network. They have more control over capacity when owning their warehouses and fleets.

When does choosing a 3PL over a freight broker make more sense?

If you need services beyond just freight brokerage, like warehouse management, reverse logistics, packaging/labeling, or supply chain consultants, a 3PL is likely the better choice. 3PLs also take on more responsibility for execution and provide greater supply chain transparency.

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