The Difference Between a 3PL, 3PL Software, and a Freight Broker

Education
2026-05-11

The logistics industry is full of companies calling themselves 3PLs when they are actually something quite different. Before you sign a contract, understand exactly what type of provider you are evaluating.**What a True 3PL Does**A true third-party logistics provider physically stores your inventory in their own warehouse, employs the staff who pick and pack your orders, and ships those orders to your customers using their carrier accounts. When you outsource to a 3PL, a real team of real people handles your products every day.3PLCity is a true 3PL. We have physical facilities in Gardena and Burbank, CA. Your inventory lives in our warehouse. Our staff fulfills your orders.**What 3PL Software Is**3PL software β€” sometimes called a warehouse management system (WMS) or order management system (OMS) β€” is technology, not a fulfillment service. Companies like ShipStation, Shippo, or EasyPost are software platforms. They help you print labels and manage orders, but they do not warehouse or ship anything.Some providers offer both software and actual fulfillment services. Always ask: do you have your own warehouse and staff, or are you connecting me to other warehouses?**What a Freight Broker Is**A freight broker arranges transportation between shippers and carriers β€” they are intermediaries. They negotiate rates with trucking companies and arrange shipments, but they do not warehouse, pick, or pack anything.Freight brokers are valuable for moving large shipments between locations β€” inbound containers from ports, LTL freight to retail accounts β€” but they are not fulfillment partners.**Why This Matters**When evaluating providers, ask directly: where is your warehouse, how many square feet is it, how many staff do you employ, and can I visit? A true 3PL can answer all of these. A software company or broker cannot.