When it comes to moving goods across long distances, road freight transport is a top choice. Murphy Logistics understands the complexities of this process and offers insights into the ongoing debate between asset-based and non-asset-based providers.
Road freight transport involves moving goods between locations using vehicles on a road network, typically facilitated by logistics companies. Different trucks are utilized based on the nature of the goods. The primary advantages of road freight transport lie in the extensive accessibility of the road network, making it a versatile and widely applicable mode of transport that is not dependent on specific logistical hubs or constrained by destination limitations.
But how do you decide which of the many types of logistics companies to use for your road freight transport needs? The ongoing debate over whether asset-based or non-asset-based providers are “better” has different companies advocating for various models, making the decision challenging for businesses seeking the right fit without experiencing both types of providers firsthand. In this blog post, we delve into the nuances of road freight transport, types of logistics companies, and pivotal decision-making factors for businesses.
What is an asset-based carrier?
Asset-based carriers, such as trucking or railroad companies, own their equipment and work directly with customers to move freight. On the other hand, non-asset-based companies like freight brokers and 3PLs act as intermediaries between asset-based carriers and customers, facilitating road freight transport without owning equipment.
Read more here: What Is an Asset-Based Carrier?
Asset-based vs. Brokerage
The three most popular choices that shippers have are utilizing a freight brokerage, using an asset-based trucking firm, or using a third-party logistics provider (3PL). Asset-based carriers, owning equipment and providing comprehensive services, enable direct communication with shippers. On the other hand, brokerage carriers, acting as intermediaries with vast carrier networks, offer flexibility for nationwide shipping but may involve a “middleman.” Choosing the ideal road freight transport provider depends on service needs, relationships, and a balanced approach, such as using asset-based carriers for local deliveries and brokerages for a broader national footprint. To learn more about the comparison, check out our recent blog post, Asset-based vs. Brokerage.
Asset-based carriers are a dependable choice, but this greatly depends on how well a shipper’s transportation requirements and freight network match the carrier’s capabilities. Shippers should take several factors into account when working with assets and figuring out how to include them in a larger road freight transportation plan.
Benefits Of Working With An Asset-Based Carrier
In this section, we highlight the benefits of using an asset-based carrier for your road freight transport needs. These benefits include reliability, cost-effectiveness, liability, intermodal support, and process optimization associated with asset-based carriers in road freight transportation. Asset carriers, with control over equipment and personnel, maintain higher standards, ensuring dependability, particularly in contract freight. Aaset-based carriers offer lower prices for warehouse storage and demonstrate financial dependability. Furthermore, the asset-based carrier assumes responsibility and provides intermodal support. Asset-based carriers optimize processes through repeated collaboration, contributing to savings.
Reliability
It is easier for carriers to maintain high standards when they control more variables, such as managing their own equipment and employing their own drivers. Asset carriers are known for higher quality and dependability than other road freight transportation options, particularly when it comes to contract freight. Asset carriers can uphold standards of quality and service throughout their fleet since they own, operate, and hire their own drivers.
The U.S. transportation industry, boasting over 3 million truck drivers, poses a challenge for shippers seeking reliable solutions. This challenge is exacerbated when dealing with third-party transportation providers lacking control over their trucking assets. Despite having access to a wider array of trucks, freight brokers may fall short in reliability compared to asset-based carriers. Asset-based carriers understand their capabilities, which may translate to heightened dependability in their specialized regions. Of course, you should carefully consider all your options for road freight transportation. There are reputable and reliable 3PL logistics providers that may be the right choice for your business needs.
Cost-effectiveness
Asset-based carriers are frequently able to offer clients lower prices since they are not dependent on outsourced equipment or labor. Customers won’t have to worry about shelling out extra cash for extra transportation-related expenses like truck rentals and warehousing leases.
The cost structure of asset-based trucking companies is more intricate, requiring substantial financial investment compared to starting a brokerage. Well-run asset-based carriers may demonstrate greater financial dependability than many third-party providers, assuring shippers of consistent service even in uncertain times. The best asset companies boast a history of resilience in the dynamic transportation industry, allowing them to absorb occasional losses on underpriced shipments while maintaining commitment to their obligations. Strong financial standing enables these companies to attract and retain top-tier truck drivers, ensuring customers receive top-notch service in every road freight transport transaction.
Liability
The asset-based carrier assumes liability while working with a customer’s business. This implies that the carrier assumes full responsibility for managing the road freight transport and will be held entirely liable for any expenses or issues resulting from defective machinery or negligent handling of the items during the freight transportation procedure.
Intermodal Support
The transportation of freight by road and rail is known as intermodal transportation. It is typically supplied by larger asset-based carriers that also function as a 3PL because it needs containers, a chassis, and a tractor. Intermodal can be an affordable mode of transportation, depending on a shipper’s requirements and freight network. Working with a single 3PL for intermodal shipments rather than different truckload transportation partners and rail freight firms may also be less complicated.
Optimize Processes
Maximizing the efficiency and cost-effectiveness of your transportation supply chain relies on the relationships and understandings cultivated with each provider. The quality of your interactions with a company hinges on its understanding of your business, industry, customers, and goals. Asset-based trucking companies possess a unique capability to learn, adjust, and optimize based on the specific needs of their customers. Through repeated collaboration, these companies continually optimize processes, learning the intricacies of your supply chain and ultimately easing the burden on your operations, leading to time and cost savings.
Partnering with Murphy Logistics
Selecting the right transportation partner is crucial for safe and timely product delivery. Understanding the distinctions between asset-based and brokerage carriers is essential for informed decision-making. Murphy Logistics stands out by operating both an asset-based fleet and a non-asset-based brokerage, offering diverse options for client shipping needs.
As an asset-based carrier, Murphy operates a fleet of trucks to help you ship your goods to destinations across the Midwest. At the same time, we operate a non-asset-based 3PL brokerage by partnering with other carriers. Doing so allows us to provide more flexibility to our customers, and it lets you reach more destinations with ease.
In the world of road freight transportation, the choice between asset-based and brokerage carriers can be challenging. Murphy Logistics, with its unique position of operating both an asset-based fleet and a non-asset-based brokerage, provides a comprehensive solution for diverse shipping needs. Whether you opt for the direct communication of asset-based carriers or the flexibility of brokerages, Murphy stands as a reliable partner, ensuring safe and timely product delivery across the Midwest. With over 118 years of service, Murphy Logistics combines experience, flexibility, and customer-centric values, making us the ideal choice for your transportation needs.
Being a woman-owned business with an emphasis on the customer, we use the EOS operating system to further improve our work. For assistance in locating the best solutions, speak with our logistics specialists by calling 612-260-9442.