Non Asset Based 3PL vs Asset Based 3PL: Which Should You Choose?
Finding a 3PL for your next shipment can be challenging because there are many options available. To make it even more complicated, there are different types of 3PLs to choose from. 3PLs are categorized based on whether they have in-house assets to provide shipping services or if they rely on external service providers.
What does it mean for a 3PL to have assets? What are the differences between a non asset based 3PL and an asset based 3PL, and which one should you choose for your next shipping experience? The answers to these questions will depend on what you’re looking for in a 3PL, but first, let’s look at each type to discover more about the two kinds.
What does “Assets” Mean for Logistics?
Assets in logistics refer to persons, places, and things that are valuable for productive logistics operations. They are tools necessary to keep the supply chain running smoothly and would falter if one of these elements or its functions were missing from the process. Some assets used in logistics include:
- Carriers
- Brokers
- Trucks or other transportation vehicles
- Warehouses
- Distribution centers
What is a Non Asset Based 3PL?
A non asset based 3PL (or non asset based carrier) is a 3PL that does not own or rent any assets. In other words, it does not move freight at all. Instead, it partners with outside carriers and service providers to arrange and coordinate freight movement on behalf of the shipper.
Non asset based 3PLs include freight brokers and freight forwarders. Despite not owning trucks or warehouses, these 3PLs are readily used by businesses and individuals because they often make deals with their carriers to offer discounts to their customers. They also offer customizable solutions since they are partnered with many carriers and services.
What is an Asset Based 3PL?
If non asset based 3PLs don’t own any assets, then asset based 3PLs (or asset based carriers) are the opposite. These 3PLs own or rent out equipment and infrastructure to move freight themselves. They own their own carriers, moving their customers’ freight or warehouses where they can store freight before distribution.
Asset based 3PLs have greater control over their operations and their part in the supply chain since they own their own fleets and infrastructures, meaning they provide a higher-quality service. However, that also means they control their prices, which means customers must use their services only while being priced higher than non asset based 3PLs would.
Let’s Compare Non Asset Based 3PL vs Asset Based 3PL
Both types of 3PLs are dedicated brokers who work with their customers to ship their freight without sacrificing quality and professionalism. However, their differences affect the relationship between broker and customer and what the 3PL can provide to enhance the shipping experience.
1. Flexibility and Customization: Non asset based 3PLs have a more comprehensive network of carriers and other services. This allows them to offer unique solutions and customizable shipping options for their customers. Asset based 3PLs are limited to their in-house carriers and services, though some provide external services depending on the load.
2. Level of Control: Non asset based 3PLs have less control over the supply chain. They are more hands-on with their shipment orders, and a good broker will know how to prevent common shipping issues from arising, but they are still limited to providing what other carriers offer. Asset based 3PLs have greater control over the supply chain since they have their own assets. This also means they set their prices, which can be more expensive than other 3PLs.
3. Coverage: Non asset based 3PLs partner with carriers nationwide (and internationally), which expands the distance freight deliveries can go. Asset based 3PLs specialize in specific routes and services, which means they are usually limited to one part of the country.
4. Quality: Non asset based 3PLs use external carriers to make freight shipments. While they vet their carriers to ensure quality service and compliance, this isn’t always guaranteed. Asset based 3PLs have their own carriers, so the quality of their shipping is usually guaranteed.
5. Motivations: Non asset based 3PLs are on the shipper’s side. They assist in finding affordable shipping rates, file paperwork, discover inconsistencies in the Bill of Lading (BOL), and make claims. Asset based 3PLs, however, are biased by nature. They want the shipper to use their services only and have limited shipping choices.
6. Price: Non asset based 3PLs go out of their way to find affordable, competitive rates for their customers. Their partnerships with external carriers include offering discounted prices and services. Asset based 3PLs, on the other hand, have greater control over how much their carriers charge since they own them. Their prices, therefore, are higher than those of other 3PLs.
Is a Non Asset Based 3PL Right for You?
Choosing a 3PL will largely depend on your shipping needs. You must consider where you and your broker’s interests align, along with other factors like:
- The complexity of your operations
- How much control do you want your 3PL to have over your shipment
- Amount of flexibility and customization you desire
- How much risk you’re willing to take on shipping your item
- The quality of customer service
- Your shipping budget
If you need a 3PL that offers brokerage, carrier, distribution, and warehousing services all in one, consider an asset based 3PL. These 3PLs provide consistent, reliable, and high-quality service. However, their services may come with higher costs and limited coverage.
On the other hand, if you require flexible shipping options, nationwide coverage, and affordable shipping, a non asset based 3PL may be the better choice for you. Although they have less control over the supply chain and need to depend on external partners, they are committed to innovating and tailoring your shipping experience. No other type of freight broker offers the same level of dedication as they do.
If you haven’t guessed already, FreightCenter is a non asset based 3PL. While we don’t have our own trucks or warehouses, we offer an extensive network of carriers nationwide. We work with our customers to customize their shipping experience while providing professional and personable customer service that won’t break the bank.
If you need a 3PL to guide you through the shipping process and optimize your shipping throughout, consider us for your next shipment! Try our free online quote tool, or call (800) 716-7608 to learn how to save on your freight today!
