3PL Vs Freight Broker

March 27, 2025

3PL Vs Freight Broker: Roles & Responsibilities

Logistics play a crucial role in global trade. With expanding e-commerce, technological advancements (like Artificial Intelligence), and rising customer expectations, demand is increasing for logistics experts like third-party logistics (3PL) providers and freight brokers.

Consequently, you may be considering a career in one of these dynamic fields. But which do you choose: Becoming a 3PL provider or a freight broker?

Well, we’ve got you covered! We’ll explore the roles and responsibilities of each and list their differences, pros and cons, and career outlook so you can make an informed decision.

3PL Vs Freight Broker: What’s The Difference?

Many shippers confuse the terms ‘3PL’ and ‘freight broker’, often using them interchangeably. However, they differ quite considerably in terms of roles and responsibilities.

What is a 3PL provider?

A 3PL, or third-party logistics, provider is a specialist service provider that outsources logistics services. They meet a business’s needs by performing logistics functions, such as warehousing, transportation, and fulfillment.

Third-party logistics companies streamline supply chains by leveraging their extensive network of carriers, suppliers, and other partners. This network provides significant buying power, meaning they can negotiate favorable rates and terms with their suppliers due to the large volume of business they conduct.

This also enables 3PL providers to manage complex logistics operations, often handling entire logistics branches for large corporations with increased efficiency.

What is a freight broker?

Freight brokers are authorized people or businesses that arrange transportation services between shippers and carriers. They do this by matching their clients (or shippers) to appropriate carriers (who have trucks, ships, and planes to move goods). They then liaise between the two to ensure the efficient movement of goods.

Freight brokers help streamline the logistics industry by negotiating freight rates between shippers and carriers, ensuring the best possible rates for shippers and fair compensation for carriers. In turn, this helps to improve cost efficiency and flexibility of supply chain management.

Roles And Responsibilities Of A 3PL Provider

Both 3PL providers and freight brokers manage the shipment of goods, but their involvement differs. A third-party logistics company provides more versatile services than freight brokers (who simply manage particular shipments).

3PL providers aim to build long-term relationships by offering comprehensive logistics solutions. They’re capable of handling any volume of freight, managing any aspect of a business’s supply chain, and providing a wide range of related logistics services.

Their main roles and responsibilities include:

Warehousing and storage: Manage warehousing operations like receiving, storing, and inventory control.
Inventory management: Tracking real-time inventory levels.
Order fulfillment: Picking, packing, and shipping products. This may also include managing returns and exchanges.
Transportation management: Selecting carriers that optimize cost and shipping efficiency.

Additionally, freight forwarding, technology integration, customer service support, value-added services (like labeling, assembly, and customization), scalability, and risk management may be included as responsibilities of 3PL providers.

Pros and cons of becoming a 3PL provider

✅ Pros	❌ Cons
Growing market demand: Businesses are increasingly outsourcing logistics services (especially 3PL companies and independent providers) to reduce costs.	High initial investment: Significant capital is needed to start your own 3PL company (warehousing, transportation, and technology infrastructure).
Recurring revenue: Long-term relationships with clients offer stable and predictable income.	Operational complexity: Advanced knowledge is needed to manage a vast network (suppliers, carriers, and warehouses).
Scalability and expansion: Easily scale into different industries like retail, manufacturing, or pharmaceuticals.	Competition: The logistics industry is filled with established players offering competitive prices.
Technology integration opportunities: Use data-driven insights to optimize operations and reduce costs.	Regulatory and compliance risks: Non-compliance with complex regulations can lead to fines, shipment delays, and legal issues.
Low client overhead: Businesses can focus on core operations while 3PLs manage the supply chain.	Reliance on clients’ success: 3PL business growth is tied to the client’s success.

Roles And Responsibilities Of A Freight Broker

Compared to 3PL providers, freight brokers operate with lower volumes of freight shipments and small to medium businesses. Their primary goal is to facilitate the efficient and cost-effective movement of goods.

Their roles and responsibilities include:

Negotiating and contracting: They negotiate competitive freight rates and prepare contracts between shippers and carriers.
Tracking and monitoring: Monitor and provide real-time tracking updates to shippers, ensuring timely delivery of goods.
Customer service: Act as a point of contact for both shippers and carriers, aiming to resolve disputes as they arise.
Documentation management: Prepare essential documents like Bill of Landing (BOL), freight invoices, shipping manifests, and other important financial records.

Brokers must also stay informed on supply and demand trends to predict freight rate changes. This helps them make more informed decisions, capitalize on higher commissions, and succeed long-term.

To effectively execute these duties and stay competitive, learning and skill development are crucial. That’s why it’s highly recommended that both newcomers and those who have been in the industry for a while complete an expert training program, like the 90-Day Freight Broker course.

Pros and cons of becoming a freight broker

✅ Pros	❌ Cons
Unlimited earning potential: The more projects you land, the more you can earn.	Regulatory requirements: Brokers must obtain authority from the FMCSA to legally arrange the shipment of goods.
Low startup costs: Brokers can get started with relatively low costs. They only need to make small key investments in licensing, and surety bonds to give them authority for operating.	Inconsistent income: New brokers, competitive markets, and slow seasons may produce inconsistent incomes.
Non-asset-based business: This means you won’t need to invest in assets or inventory.	Competitive industry: The logistics industry is filled with seasoned professionals who may have control over the client base.
Scalability and flexibility: Brokerages are easily scaled.	Fast-paced: Brokers need strong organizational and sales skills to manage multiple shipments, negotiate rates, and resolve logistical issues.

Key Differences Between A 3PL And A Freight Broker

Factor	3PL Provider	Freight Broker
Handles cargo?	Yes	No (only facilitates transport)
Provides Insurance?	No	No
Storage & Warehousing	Varies (most offer storage and warehousing)	No
Regulatory Requirements	Higher (complex regulatory requirements)	Lower (broker authority required)
Startup Costs	Higher	Lower
Profit Potential	Higher (larger profit margins)	Lower (commissions only)
Business Model	Varies (Many are asset-based)	Non-asset-based

3PL Vs Freight Broker: Career Outlook

The career outlook for both 3PL providers and freight brokers is robust.

For 3PL providers, success hinges on embracing cutting-edge technological solutions, prioritizing sustainability, and adapting to global trade shifts. Those who can navigate these challenges and deliver efficient, high-quality service will find ample opportunities!

Similarly, expanding e-commerce and a rise in customer satisfaction expectations for faster, more reliable deliveries are fueling the freight broker market. In fact, the market is predicted to grow significantly from $51.7 billion in 2023 to $85.9 billion by 2032. This means that brokers with the right skills and knowledge will be able to thrive in the industry, enjoying many growth opportunities.

3PL salary

As of 2025, the average annual salary for a third-party logistics provider is $76,301, with providers in the 90th percentile earning up to $116,500. This highlights significant jumps in earning potential and suggests ample growth opportunities based on skill level, location, and experience.

Freight broker salary

The average annual base pay for a freight broker is $52,460, with those in higher earning percentiles earning over $70,000 annually.

Usually, freight brokers also earn commission over and above their base pay. This rate generally ranges between 15-18% of their gross profit margin for each project.

FAQs

1. What is the difference between a 3PL and a trucking company?

Third-party logistics companies provide a broader range of logistics services, including transportation, warehousing, and fulfillment. Trucking companies specialize in only the transportation of freight by truck.

2. Is a 3PL a freight broker?

No. A 3PL is a company or provider that conducts various logistics services, including warehousing, transportation, and fulfillment. However, some 3PL providers may offer freight brokerage services.

3. What is the difference between a logistics and a 3PL provider?

A logistics service provider is a broad term that describes professionals who manage logistics services. A 3PL provider specializes in outsourcing a business’s logistics functions.

Final Thoughts

The roles and responsibilities of 3PL vs freight brokers vastly differ.

3PL providers deal with a vast network of shippers, carriers, and suppliers, transporting larger volumes of freight shipments. These higher volumes produce higher earning potential but also come with more responsibilities, challenges, and potential risks.

On the other hand, freight brokers liaise with shippers and carriers on freight transportation services, managing smaller volumes of freight shipments.

If you have the necessary skills, knowledge, experience, and industry connections, becoming a 3PL provider may be ideal. However, if you want a quicker entry into the market and have a limited budget for start-up costs, consider becoming a freight broker.

If you are still unsure, consider enrolling in our comprehensive 90-Day Freight Broker Training Program. Gain industry insights from well-known freight brokers, and learn in a way that suits you, either via audio, video, or text.

Sources: