Tag Archives: non-asset based 3pl

Busting The Myths About Non-Asset Based 3PLs

We understand why it might often be assumed that an asset-based carrier has more advantages than a 3PL. Quite often, shippers don’t feel comfortable working with non-asset based 3PLs and end up limiting, and thus hurting, their supply chain.

There are a few common myths surrounding the never-ending Asset Based VS Non-Asset Based 3PLs battle. It’s time to look at these misconceptions and destroy the myths.

Myth #1: 3PL is a middle-man, thus, their service will be more expensive.

You remove an extra tier and save money. It seems straight-forward, right?
non-asset based 3PLs

Well, this is actually not true! 3PL’s can offer better rates due to their extensive carrier base and volume. 3PLs take full advantage of discounted backhaul rates and use their volume to negotiate the best rates. In addition, a non-asset based 3PL will always negotiate in the customer’s best interest as they are not putting your freight on their own trucks.

Myth #2: It’s harder for a 3PL to provide stable capacity for your freight

They never have a truck right there in the yard which they can send to pick up your load immediately.

They don’t, but an asset-based carrier might not have a free truck sitting there waiting for the load, either. As already mentioned above, a 3PL has constant access to an extensive carrier base and has much better chances of finding a qualified available carrier to receive your shipment.

3PLs are constantly building strong relationships with carriers to be able to provide stable capacity for their customers even in the times of a capacity crunch.

Myth #3: It’s harder to rectify issues with non-asset based 3PLs

It will take longer, and it will be much harder to resolve issues/claims when you have to go through an extra company between you and a carrier.

You might think so, but the successful resolution and customer satisfaction is a 3PL’s first priority, and they will fight for you on your behalf. Instead of going directly after a carrier (who will tend to be more interested in defending their own interests), you will have a 3PL claims department working in your best interest to get the claim taken care of.

Overall, a 3PL will always be on your side – It’s literally their job to minimize potential issues and make the process as smooth as possible for you.

Have any of the above been holding you back from partnering up with non-asset based 3PLs? Maybe this will help you tackle your fears and open new supply chain opportunities for your business.

Don’t put unnecessary limits on your supply chain. Looking for a 3PL to help you handle your transportation needs? We are here to help!

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Long-Term Partnership with a 3PL – Successful Strategies

 outsourcing logistics managementThe process of outsourcing logistics management involves a lot of trust and a costly investment for both parties. Although 3PLs find new ways to provide value for clients, many shippers are not ready to initiate strategic and long-term relationships that require deeper implementation.

Outsourcing logistics management specific parts of business operations to an expert is not uncommon. Since 3PL can reduce transportation costs and improve customer service, many companies outsource inbound and outbound transportation. 

5 major benefits of outsourcing logistics management:

  • Gain expert analysis and other resources to help in decision making
  • Free up time to focus on core competency – No more manual processes
  • Maintain/Improve customer service
  • Improve supply chain efficiency
  • Enhance operation productivity

A 3PL has the ability to discover profitable solutions through competitive analysis, inbound vendor management, and ancillary reports. Some companies find more benefits and savings from spot movements, while others need full support to centralize transportation management software.

Why use outsourcing logistics management?

When a 3PL provider and shipper enter an embedded, long-term partnership, the 3PL functions as a seamless part of the customer’s supply chain. Also, the embedded level refers to 3PLs and shippers working in close, long-term partnerships.

This form of relationship requires 3PL providers to invest in technology and facilities, so they ensure complete transparency. The main goal of an embedded level partnership is to share risks and gains between parties so that both can achieve a competitive advantage and provide customer satisfaction. Here, a 3PL becomes a part of the strategic team that will plan the supply chain strategy according to the shipper’s needs.

Final thoughts

For effective transportation management, PLS’ mission is to become an extension of the customers’ supply chain network. Fully understanding a customers’ supply chain allows PLS’ team of experts to compare rates and lanes, analyze reports and volume, and then suggest the best solutions based on customer needs.

Learn more about our Outsourced Transportation Management services! 

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

non-asset based 3PLThere are several benefits to 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. There are two categories of 3PLs: asset-based and non-asset based 3PL.

Read 6 Reasons to Outsource Transportation

The main difference between the two is that asset-based firms own part of the supply chain, like trucks, distribution centers and/or warehouses. On the other side, a non-asset based 3PL, predictably, does not own supply chain assets.

Asset-Based Non-Asset Based
  • Owns many or all assets in the supply chain
  • Can take care of the 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 the 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.

Read What a 3PL Can Do For You

There are pros and cons to both types of 3PLs. Likely, the goal of both is to reduce errors, cut costs and improve general initiatives. However, asset-based firms could encounter a conflict of interest, because 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. Also, 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. Also, we are experts at negotiating and can provide documentation of proven successes. We’re proud to offer transparent, trustworthy services to shippers.

Learn more about our Outsourced Transportation Management services! 

How to Choose a 3PL

 

 3PLThird Party Logistics (3PL) companies started to spring up in the 1980s as a viable method of outsourcing logistics needs. 3PLs make it easy for large companies to get rid of various functions and assets. This is made in order to focus more heavily on their core business objectives. A 3PL can save your company millions of dollars and time, allowing you to dedicate more resources to your essential initiatives.

There are a few variations of 3PLs:

  1. Asset-based firms use their own trucks, warehouse, and personnel to operate their business.
  2. Non-Asset-based firms do not own their own trucks or warehouse space. They provide outsourced logistics solutions and freight brokerage services and have a large network of freight carriers that they partner with.
  3. Warehouse/Distribution-based firms have a warehouse and/or distribution experience.
  4. Financial-based firms provide freight payment and auditing, cost accounting and control, tools for monitoring, booking, tracking and tracing and manage inventory.

PLS Logistics Services, a non-asset based firm, is able to adapt to all clients’ needs because of our unique approach to the business that allows us access to thousands of transportation solutions across the country.

When it comes to selecting the right 3PL there are many factors to consider:

  1.       Do you have your own assets?
  2.       Can the 3PL meet your service requirements?
  3.       What is the 3PL’s track record? How do they rank nationally?
  4.       Does the 3PL work within your region?
  5.       How flexible are they? Do you require any special services they can’t supply?
  6.       Does their culture blend well with your company’s culture?
  7.       Do they have any reputable references? Have other branches of your company worked with them in the past?

You ultimately trust this company to represent you. You want to make sure they not only meet your required needs but that they are a good fit for your company as well. We recommend you take the time to research a few different 3PLs. That way, you can pick one that best suits your overall needs and goals, and not just best suits your budget. You want to find a 3PL that you can work with repeatedly and build a relationship with.

Learn more about our Outsourced Transportation Management services!