ICAT Blog: Article Advantages of a Non-Asset-Based Logistics Provider
March 23, 2022
Picture this: You’re looking to outsource the logistics processes for your business, or you’re in search of a new logistics company. During this time, you need to make the ultimate decision of whether you should choose an asset-based or non-asset-based logistics provider. While both types have their advantages and disadvantages, you’d be surprised to know that a non-asset-based company has much more to offer than meets the eye.
What are some of the advantages of working with a non-asset-based logistics provider?
1. They focus on providing expertise rather than equipment.
Instead of being limited to the equipment they own, a non-asset-based logistics company has nearly unlimited options. By utilizing external resources to move the freight, these types of providers can focus on bringing knowhow to the forefront. They can identify the best ways to move your freight and propose custom solutions depending on the specific needs of the customer.
2. They can offer flexible solutions for fast-growing companies.
Flexibility is a crucial component of successful businesses and being able to scale that flexibility as a company grows is key to a lucrative partnership. Non-asset-based logistics providers can meet the demand of market trends and unpredictable changes. This includes the facility options they can offer. Asset-based logistics companies will naturally attempt to fit your business into their already-established infrastructure, while a non-asset-based provider can design the infrastructure around your needs.
3. They can deliver a wider range of shipping options.
Non-asset-based logistics companies outsource their transportation to other carriers and agents. By having this type of business model, they can offer a vast breadth of shipping solutions. And the bigger the network, the more flexibility in mixing and matching to create the most optimal outcome for the customer.
4. They can better protect your interests as a customer.
As the customer, you want your interests to be top of mind for your logistics provider. Non-asset-based logistics companies can approach a client’s needs by focusing on what makes the most sense for their business rather than amortizing a specific resource or piece of equipment that asset-based providers need to consider. A non-asset-based provider is also free from vested interests and can steer clear of bias when acting to protect a customer in the case of a claim for damages or loss.
5. They must pay to be recognized by the Department of Transportation.
Sounds crazy, but this is true! Before 2013, any organization could claim to be a non-asset-based logistics provider. The reporting requirements were virtually nonexistent, and some genuine asset-based companies took full advantage of this to claim non-asset-based operations. That all changed in 2013 when the DOT mandated a $75,000 freight broker surety bond for all non-asset-based providers. Therefore, true non-asset logistics providers were the ones that could reasonably pay the bond without disrupting current operations. This payment ultimately shows potential shippers that non-asset providers have already taken measures to ensure the safety of their customers and partners.
Resources:
- 7 Advantages of a Non-Asset-Based 3PL Provider (EuroTracs)
- Advantages of Using a Non-Asset Based Logistics Provider (Business 2 Community)
