Is a Non-Asset Based 3PL Right for Your Company?

supply-chain-managementThere are several benefits for your business when outsourcing the supply chain; as it will reduce costs, improve service and allow the shipper to focus on core competency. Third-party logistics firms give you a chance to provide value through solutions, service and expansion.

3PLs are broken up into two categories: asset-based and non-asset based. The main difference between the two is that asset-based firms own part of the supply chain, like trucks, distribution centers and/or warehouses. A non-asset based 3PL, predictably, does not own supply chain assets.

Asset-Based Non-Asset Based
  • Owns many or all assets in supply chain
  • Can take care of entire supply chain
  • Set pricing
  • Align your solution within their strategy
  • Knowledge and expertise to identify and evaluate challenges and solutions
  • Negotiate for cost savings
  • Flexible, work with large carrier network
  • Uncover hidden freight costs

There are many misconceptions about non-asset based third party logistics companies in the transportation industry. This is understandable because before 2013, just about anybody with access to the internet and phone could claim themselves as a non-asset based 3PL; that is until DOT changed the freight broker surety bond to $75,000. Today, a good 3PL will be a transparent, collaborative logistics partner that saves money and drives value for a shipper.

There are pros and cons to both types of 3PLs. The goal of both is to reduce errors, cut costs and improve general initiatives. Asset-based firms could encounter a conflict of interest; they’re managing your logistics using their assets, but a non-asset 3PL doesn’t have any hidden agenda. Since non-asset based firms act as the third party in every aspect, they can’t use their own assets as an advantage.

Some key benefits to outsourcing transportation to a non-asset based 3PL include:

  • Competitive carrier rates and secured capacity
  • Knowledge on base rates, surcharges and other fees
  • Continuous optimization for business improvements
  • Collaboration and partnership to build long-term results

PLS Logistics is a non-asset based 3PL. PLS lets you focus on your job’s responsibilities while your single point of contact runs your supply chain. PLS doesn’t have an inventory of assets to keep profitable; our team connects to a large carrier network to eliminate inefficiency and provide value at a low cost. We are experts at negotiating and can provide documentation of proven successes. We’re proud to offer transparent, trustworthy services to shippers.

Continue Reading: What a 3PL Can Do For You and 6 Reasons to Outsource Transportation.