Redwood Blog

Asset Vs. Non-Asset Based 3PLs

Which is right for you?

Asset-Based vs. Non-Asset Based Providers

Deciding whether to go with an asset-based or non-asset based third party logistics partner is a tough decision. Keeping transportation costs low and levels of reliability and service high can be hard to balance. You could choose an asset-based provider with their own fleet of trucks, a non-asset based provider that works with a network of carriers, or maybe even both. Let’s look at the options.

Asset-Based Providers

With asset-based providers, their network takes priority. They want to maximize equipment use to keep their network fluid. This necessity determines everything – including your rates, if the equipment is available, and when you can get it. Shippers may find themselves on their providers schedule – not their own. Asset-based providers can sometimes offer competitive rates, but not always. If everything lines up and you fit into their preferred network and can adjust to their schedule, you may have lower transportation costs. If you don’t fit into their schedule, can’t always adjust, or aren’t in their preferred network, that rate advantage will disappear. Another issue is that sometimes the needs of the provider’s network may change, at any time. When that happens, you’ll have to adjust. Changes can affect your rates, available capacity, and loading schedules. Your geographic location, volume of business, and the provider’s competition all affect the provider’s priorities. All you can do is hope that you don’t have to scramble to find another provider for your freight.

Non-Asset Based Providers

Non-asset based providers have access to all carriers across every mode of transportation. Networks no longer matter – just what you, as the customer, need. They can create custom solutions for every client and are flexible when their client’s needs change. Non-asset based providers look at all options to find the best option for you, not just their own network. All equipment types are considered – every railroad, ship, and carrier. Finding the best option for you at the best cost is simple. They can even put your existing infrastructure to work and incorporate it into the complete solution. Non-asset providers don’t have to invest in equipment. Instead, they can pour resources into providing superior technology, customer service, and expertise. Since their focus isn’t split between you and managing their own fleet, 100% of their attention can focus on your needs – not the needs of a network.

Choosing Between the Two

When considering a 3PL, you are evaluating a true business partner. The efficiency of your supply chain has a direct effect on the reputation of your business. Don’t entrust your reputation to just anyone with a low price. You want to work with someone that is eager to find the best solution for you, based on your needs.