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Asset-based carriers vs non-asset based carriers

Pro’s and Con’s of Asset Based Carriers vs. Non-asset Based Carriers

Industry Insights / March 1, 2021

Background: MFW is a third party logistics company (3PL) that’s been in business since 1999. We handle all freight modes including Less than Truckload (LTL), Intermodal, and Full Truckload (dry van, reefer, flatbed, oversized, drayage, cross dock, and bulk). We relish in performing for our customers in the critical moments of a shipment; and strategically utilize our carrier partners to help our customers delight THEIR customers. Learn more about our history HERE. Read below to hear our take on the Pro’s and Con’s of working with an Asset based carriers vs non-asset based carriers.

Pro’s and Con’s of working with an Asset Based Carrier vs a Non-asset Based Carrier (3PL)

PRO’s of working with an asset based carrier:

  • The Carrier owns their trucks 
  • More consistent performance (good or bad)
  • You have a direct line to the provider at all times

CON’s of working with an asset based carrier:

  • All your eggs are in one basket, you are limited to one providers equipment.
    • Greater chance of re-brokering
    • Smaller geographic footprint
    • Only one product offering
    • Less flexibility in finding cost efficient solution
    • Fewer recovery options in the event of equipment breakdown
    • Carrier Compliance/vetting must take place in house
    • No team dedicated to back office support

Let’s look at the other side of the Asset Based Carriers vs Non-asset Based Carriers coin.

PRO’s of working with a non-asset based carrier (3PL): 

  • Larger pool of carriers that grows daily 
    • Not tied to any one provider
    • Keeping the pricing honest and competitive
    • Ensuring all carriers are compliant 
  • Services performed, such as:
    • Coordinating the pickup and any necessary appointments
    • Tracking the status of the carrier along the way – including real time visibility of the whereabouts of your freight 
    • Coordinating the delivery and any necessary appointments
    • Freight recovery in event of equipment breakdown
    • Claims/dispute resolution
    • Payment of the carrier 

CON’s of working with a non-asset based carrier (3PL):

  • With some brokers, you may have a tough time getting visibility to the freight, and may or may not have the ability to contact the driver. Not all 3PLs have invested in freight tracking technology.

For some shippers their volume, shipping lanes, and required modes may make asset based carriers the better choice. For other shippers, higher variance in shipping lanes or required modes make it the right decision to outsource the responsibilities of growing and maintaining a carrier network, investing in tracking technology, and servicing the shipment from pickup to delivery. 

 Learn more about how to choose a provider with MFW

Freight can be a tricky topic that ebbs and flows with market conditions. If you’d like to get our expert opinion on asset based providers vs. non-asset based providers for your particular situation feel free to reach out to our team!