The supply chain is a complex, intricate system. Every day, items are transported throughout the globe using a variety of ways, from production to distribution to wholesalers to final consumers. Many shippers rely on third-party logistics services to guide them through this complicated procedure or handle all parts for them in order to do this work effectively. Generally speaking, there are two main types of third-party logistic providers (3PLs). One is asset-based and the other is asset-light.
In this blog, Stream logistics will walk you through asset-light and asset-based logistics providers and assist you in your journey of picking one.
Asset-based and Asset-light logistics providers
Asset-based logistic providers are the ones who own all the assets needed to operate the supply chain movements for their clients. The assets can be trucks, trailers, warehouses, distribution centers, and anything that influences freight forwarding.
Conversely, asset-light logistics providers do not own these assets of the supply chain. Instead, they offer their knowledge in contract negotiations with warehouses, trucking firms, and distribution centers in order to manage your supply chain at the least expensive price for your company. An example of an asset-light logistics provider would be Stream Logistics. Instead of owning a fleet of trucks, we utilize our relationships with carriers all around US and Canada to provide competitive prices across a range of shipping lanes.
Major Differences between Asset-light and Asset-based 3PLs
Asset-light and asset-based logistics providers have their own strengths and weaknesses. Choosing the right logistics provider depends on your individual needs.
1.Flexibility and ability to offer custom solutions
Asset-based logistic providers have their own carriers. Therefore, they will be only relying on these carriers to transport your freight where ever. Their carriers likely specialize in different lanes or only have a presence in a certain part of a country. This cuts flexibility and customization options short.
Asset-light 3PLs have a wider network. When it comes to carriers, they typically have access to multiple carriers in various parts of the country. Most asset-light logistics providers also have access to various warehouses around the country. This provides you with greater flexibility than asset-based.
2.Control over the supply chain
Since asset-based logistics providers use their own assets when operating the supply chain, they have more control over the supply chain. They do not have to deal with any other parties, giving them the liberty to decide the price tag, punctuality, and quality of their services.
Asset-light logistics providers have less control over the supply chain since they operate their clients’ supply chains through third parties. There are many hands involved in the process, so the logistics provider has less control over what the carrier does. Working with a quality asset-light 3PL such as Stream Logistics is crucial to prevent issues and disruptions. A well-established asset-light logistics provider maintains links with only reputable carriers, streamlining the shipping process.
3.Conflict of interests
Asset-based 3PLs are more likely to be biased in deciding the most profitable logistics solution for a customer. Since they directly own the assets needed to provide the logistics solution, it’s in their best interest to limit customers from using any outside services that will cut down their profits.
The interest of an asset-light logistics provider is more oriented toward the satisfaction of the client than the carrier. The logistic provider will investigate any inconsistencies in your invoices on your behalf, aid with claims, and utilize their knowledge to improve the efficiency of your shipments. A customer is more likely to choose an asset-light logistics provider if their solutions are cheaper and quicker.
Many companies use a mixture of both asset-light and asset-based when dealing with their logistic needs, minimizing their expenditure. Choosing between asset-light and asset-based logistics providers entirely depends on your individual shipping needs.
Are you looking for a trustworthy, efficient carrier to deal with your logistics needs? You need not look further than Stream Logistics. We provide streamlined logistics solutions to meet your every need. We take responsibility for your goods for some of the industry’s best prices.