Asset Based or Non-Asset Based 3PL, Why Does It Matter?

There are many similarities among third party logistics providers. We all conduct supply chain functions in some form or another and we are all focused on increasing overall efficiency for clients while reducing costs. But there is one major difference between us that defines how we achieve those functions. And that key difference applies to assets.

What to Know About Asset Based 3PLs

Asset based third party logistics companies own some or all of the physical assets necessary to handle supply chain management. Brendamour Warehousing, Distribution & Other Services is an asset based 3PL provider because we own our own warehouses, racking systems, lift trucks, warehouse equipment, computerized warehouse management systems and other warehousing and distribution equipment. We also have contract trucking partnerships with interstate and intrastate trucking companies that allow us to obtain the lowest price possible for distributing your goods.

Because they own assets, asset based 3PLs are able to offer clients complete supply chain solutions, from storing to moving goods, at a low cost. They are also able to manage every step of the supply chain process because it is all done in-house.

Asset based third party logistics providers also represent stability because they have invested in the long-term operation of their company. They are more likely to expand over the years rather than close up shop or move. They also do not have the fear of a building lease terminating, leaving clients out to dry.

Understanding Non-Asset Based 3PLs

Non-asset based third party logistics companies do not own their assets. Rather, they contract with various warehouses, distribution centers and trucking companies to manage and execute their clients’ supply chain needs.

Because they negotiate contracts with other vendors in supply chain management, non-asset based 3PLs can be more flexible in handling the diverse needs of its clients and in providing logistics solutions.

However, non-asset based logistics providers outsource responsibilities to other companies, so there are more hands involved in storing and moving goods. With less control over the logistics by one company, there are more opportunities for errors. Furthermore, since there are no assets at stake, non-asset based 3PLs have nothing to hold them to a particular location or a long-term business operation.

Choosing Between Asset and Non-Asset 3PLs

When it comes to choosing a third party logistics provider, asset and non-asset 3PLs hold their own advantages and disadvantages. When selecting the best 3PL for your needs, it’s important to consider which method is right for your business. This asset vs. non-asset 3PL comparison chart will help you with that decision.

Differences Between Asset Based and Non-Asset Based 3PL Providers

Asset Based 3PL Non Asset Based 3PL
Easy access and instant availability to trucks, warehouses and other logistics. Greater flexibility in meeting diverse supply chain needs of clients on a case-by-case basis.
High efficiency in managing all or part of your supply chain functions. Cost is dependent on effective negotiations, but market changes may cause higher costs.
The lowest cost possible through the use of sophisticated warehouse management systems. Relies on personnel and work standards of numerous outsourced vendors so the risk of error is greater.
Dealing with one company. With very few go-betweens, the risk of error is low. Serves more as transportation consultants in determining the best method and price to move your product.
Expertise in the management of their assets to the benefit of their clients. Greater database of logistics contacts.

The Best of Both Worlds at Brendamour

Brendamour Warehousing and Distribution offers the best of both worlds because we own assets involved in warehousing, but we rely on our database of trusted carriers to help us effectively and efficiently move your goods to wherever they need to go.

At Brendamour, our main goal is to serve your logistics needs, whether it’s warehousing, inventory control, order fulfillment, processing, packing, distribution, or office rentals. We even handle import and export needs and we’re a designated foreign trade zone. Think of us as an extension of your company, providing any service you need. Whenever you need extra support, think Brendamour Warehousing, Distribution & Services, Inc. We’re just an email or phone call away!

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