Asset-Based vs. Brokerage Transportation
When businesses are deciding which 3PL (3rd Party Logistics Provider) to work with, one of their considerations will be whether they want an asset-based or brokerage transportation system. Some 3PLs may also offer a hybrid model that relies on both types to varying degrees. The distinction is simple. Asset-based transportation providers own and operate their fleet of vehicles, while brokerages work with outside contractors to manage their transportation network.
Both options provide their own strengths and weaknesses, which may not be obvious at first glance. Without having their own trucks, brokerage transportation providers rely heavily on their relationships with a variety of carriers to find the best fit for each of their clients’ needs. Brokers must be keyed into the shipping needs of their clients, and aware of trends in the shipping industry, current pricing and availability being of primary concern.
By employing an asset-based transportation fleet, 3PLs have direct knowledge of which vehicles and drivers are available at any given moment. They can optimize their transportation network, as thyssenkrupp does using a sophisticated transportation management system (TMS).
From the dedicated logistics control tower at our transportation management center (TMC), our fleet of over 250 trucks and 400 trailers are constantly being monitored by a team of fleet management specialists. Deliveries can be expedited at both a local and regional level. Yard and dock management helps keep the entire network running more smoothly than with outside drivers who may not be familiar with specific locations.
The TMC can provide load analysis and optimization to help save costs when managing less-than-truckload (LTL) shipments. Further, when dealing with a large geographical area they offer origin and destination analysis to keep things moving as quickly and efficiently as possible. Specialized equipment is more readily available; thyssenkrupp utilizes a variety of flat bed and conestogas to fit those pesky oversized or oddly shaped loads.
In circumstances when thyssenkrupp vehicles are inappropriate for a particular job, our brokerage specialists will find the most competitive contracts for whatever needs to be moved. In this way clients can be assured they will always have ready access to freight. Using this hybrid transportation model waste, complexity, and errors are all reduced.
Brokerage transportation is sometimes viewed skeptically, due to past bad experiences or simply not wanting to deal with a “middleman.” As with any service however, experiences will vary, and there are certainly exceptional brokers and underperforming asset-based systems. At thyssenkrupp we strive for the perfect balance, which in our case is a large asset-based fleet supplemented by our TMC when it benefits our clients’ needs.