Why You Need to Know The Difference Between Asset-Lite and Asset-Based 3PL Providers
Asset-Lite and Asset-Based 3PL providers have one key difference that is important to take into consideration when planning your supply chain. One can manage things in-house one cannot. But it’s not that simple.
To begin, an asset-based 3PL implies that the provider actually has the assets in-house. Examples of assets include trucks, warehouses and distribution centers, vans, and more. 3PLs who are asset-based are able to provide services at a reduced cost to consumers. This is because they are not paying an additional party in the supply chain.
Asset-Lite and Asset-Based 3PLsdo not have these tools in-house at their disposal, and they rely on additional entities to handle warehousing, transportation, distribution, etc. There are often freight brokers.
A huge benefit of an asset-based carrier is that they can reduce the links in the supply chain. However, there are equally valuable benefits to working with non-asset based logistics providers.
What to Consider When Deciding
Asset-Lite and Asset-Based 3PLs without assets, offer expertise in negotiating contracts with warehouses, distribution centers, and trucking companies. Because they have to outsource, the value of a non-asset based 3PL is largely dependent on the strength of their network. With strong networks, their ability to negotiate will allow them to pass on savings to their customers.
Though the benefits of each are present the decision ultimately depends on your supply chain needs. When deciding which type of 3PL is best for your business, consider your overall business goals and the way you want to design your supply chain. Having a highly functional supply chain can grow your business, so you want to think about your 3PLs flexibility and your level of control.
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For more information on the basics of what to look for in a 3PL partner, check out our post on Qualities Everything 3PL Should Have.
Learn how working with a logistics partner can help you automate your supply chain and scale your business. The Freight Hub Group is an asset-based 3PL provider, meaning we offer all company-owned assets, ensuring a high level of quality control for logistical services (transportation, container drayage, warehousing and much more). We have served owners of businesses varying in size and product for more than 10 years.
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