Freight Shipping Companies: What’s the Difference Between Asset Based and Non-Asset Based?
An asset based carrier is a company – like a trucking company, LTL carrier or railroad carrier – who has their own equipment and works directly with customers like you to move your freight. Conversely, freight brokers and 3PLs, like Trinity Logistics, are non-asset based companies. We have no equipment and simply act as the middle man between the asset-based carriers and customers like you, in order to arrange the shipment of your freight.
The debate about which kind of provider is “better” – asset based or non-asset based – has been ongoing for years. Some argue that they’ll only work with asset based carriers, others swear by sourcing everything to a single 3PL, and a good amount of companies work with a mix of both kinds of providers. When you’re trying to decide which type of provider is a good fit for your business, weighing the pros and cons can be difficult when you haven’t had the experience of working with both.
There are four major areas where working with a non-asset based 3PL, like Trinity, is beneficial:
Single-Source, Multimodal Service
If you’re a larger company, you might be shipping a mix of truckload, LTL, and intermodal freight. Working with asset based providers means you’re working with separate truckload carriers, LTL carriers, and intermodal carriers. That can get a little complicated. A multimodal 3PL like Trinity offers all of the above shipping services, so you can rely on one single point of contact for all your shipping needs. This is very convenient, for instance, when you want to compare the cost of moving a shipment over the road vs. over the rail – you can do that in a single step, rather than reaching out to multiple freight shipping companies.
Truckload Capacity and Carrier Sourcing
In the world of truckload shipping, capacity is unpredictable. Currently, truckload carriers are still recovering from the harsh, long winter in the US, compounding with a delayed produce season. When you consider the severe driver shortage that’s only worsening, it’s clear that truckload capacity is something to worry about.
This is where working with a non-asset based provider comes in handy. We’re the ones who find the truck – not you. Conversely, when you work directly with an asset based carrier, you have access to the capacity of their own fleet only. Our network of over 30,000 carriers is ready and waiting to help move your freight, and a network of that size is simply beyond what most companies have access to.
There’s nothing worse than unknowingly shipping freight with a carrier who is uninsured, a scammer, or non-compliant with government rules and regulations – especially if an accident or theft occurs. Unless your staff has the time and resources to thoroughly vet each asset-based carrier to verify their credentials and compliance, working directly with asset-based carriers may introduce unnecessary risk into your supply chain. Any approved carrier in our network has gone through an intense approval process, so working with Trinity (or any reputable 3PL who follows a similar carrier vetting procedure) may save you a potential headache down the road.
Unless it’s one of the larger asset based carriers, many carriers only have a presence in one portion of the country, or only prefer to run certain lanes. A huge benefit of working with an established 3PL or freight broker is that no equipment means no boundaries. For example, we have over 90 offices spread across the US and Canada, so we can virtually service any lane, thanks to our expansive carrier network. The same will be the case for any other top logistics companies. You won’t have to spend extra time calling certain carriers for certain lanes, or searching for a new carrier when you open that new distribution center across the country.
Are there benefits to working with asset based providers, too? Absolutely. The best decision for your company will simply depend on your circumstances, your logistics department, and the kind of service you require. We would love to talk to you about working with a 3PL, if you still have questions! Leave a comment below or ask us a question here!