Providing your user with an excellent delivery experience is just as valuable as your ability to offer a high-quality product. A positive experience can make or break whether buyers will trust your product or service in the future. ShipStation’s latest report reveals that around 83% of customers might not consider buying from a retailer after a negative delivery experience.
Choosing the best third-party logistics partner can significantly improve your business. A 3PL provider works as an outsourced partner by taking ownership of your delivery process. Choosing a 3PL provider is a significant decision, and one you shouldn’t make lightly. The two types of logistics providers are asset-based and non-asset-based, and they will influence your customer satisfaction levels.
This guide to choosing a logistics provider will review asset-based and non-asset-based 3PLs by highlighting their advantages and disadvantages.
What Is an Asset-Based 3PL?
Asset-based 3PLs are logistics companies that own some or all the aspects required for shipping operations. These providers offer services like transportation, warehouse storage and distribution trucks to run the client’s supply chain.
An asset-based 3PL has consistent access to information and the means to do so. They have designated drivers providing transportation and privately owned warehouses. These assets assure you and your customer that the products will stay safe during transit and arrive on time.
Asset-based third-party logistics providers should be willing to share documentation of their strengths and weaknesses and testimonials from previous clients. You can verify their resources with the certification they provide and gather all the necessary information you need to decide.
What Is a Non-Asset-Based 3PL?
Non-asset-based 3PLs are logistics providers that work without owning any of the necessary assets. These providers do not invest in trucks, warehouses or distribution centers. Non-asset-based providers negotiate deals with warehouses and trucking companies to facilitate their clients’ supply chain.
This process allows them to offer their services at a low cost. Non-asset-based providers bring expertise in managing and facilitating the supply chain instead of their assets. Since these providers do not maintain an inventory, they can provide more flexibility than asset-based 3PLs.
When you choose a non-asset-based provider, you will be working closely with their experts, but they will take care of the supply chain execution and maintenance — giving you the freedom to focus on your core business.
Advantages and Disadvantages of Asset-Based 3PLs
Asset-based 3PLs own the inventory needed for a smooth supply chain, allowing them to offer more convenient solutions.
Some of the advantages of an asset-based 3PL include the following.
- Security: 3PL providers are less likely to shut down unexpectedly and leave you scrambling to find solutions.
- Stability: Asset-based 3PLs own the physical assets to handle the supply chain and don’t need to rely on third-party providers.
Here are a couple of drawbacks to keep in mind.
- Fixed rate: Asset-based 3PL providers use resources they own, so you don’t get the benefit of a reduced cost or room for negotiation.
- Less flexibility: Their investment in resources limits their capabilities somewhat. They also may not use cost-saving automation solutions.
Advantages and Disadvantages of Non-Asset-Based 3PLs
Non-asset-based 3PLs don’t own the inventories and means to handle your supply chain. You are essentially hiring them for their expertise. They analyze their clients’ needs and suggest opportunities for improving your existing supply chain. You will be working closely with the non-asset-based 3PL, and they will help you identify the best approach to reduce costs and optimize your supply chain.
Why might you choose a non-asset-based 3PL?
- Personalization: Non-asset-based 3PL providers will design and execute a supply chain tailored to your specific needs.
- Flexibility: They will help you find the best carriers, warehouses and distribution channels in your budget, and implement cost-saving solutions where possible.
Some disadvantages to be mindful of are as follows.
- Reduced stability: They don’t have any solid infrastructure, which allows them to shutter the business abruptly and leave their clients out to dry.
- Added risk: Outsourcing responsibilities to other companies can result in poor supply chain management, which can affect your business if things go wrong.
Where Does ExpressIt Land?
The ever-growing need for improvements has inspired some asset-based third-party logistics providers like ExpressIt to adopt non-asset-based components into our operations. This flexibility enables us to serve customers with our infrastructure and expertise, letting our clients enjoy their improved solutions with the same trust.
Hybrid models allow us to hold infrastructure for decision-makers looking for a trusted partner, while offering versatility and an increase in reach by outsourcing some services. That way, you get the benefits of reduced cost without the fear of a provider abandoning you. ExpressIt works on this hybrid model, and we keep some inventory on hand to satisfy typical demands.
We can also handle any spikes in orders by negotiating deals with other owners. One of the crucial benefits of this model is quality. ExpressIt’s asset-based 3PL will arrange agreements with transportation and warehouse owners who work on a similar model while maintaining top-notch services. Hybrid companies like ours are uniquely capable of providing reliable and consistent services.
How to Choose the Best Logistics Provider
An outstanding 3PL provider will handle all your supply chain needs, while representing an asset to your business. It is essential to compare service providers to make the best choice. While asset-based and non-asset-based providers can offer unique benefits, assessing your needs and choosing the ideal option can reflect positively on your company. Hybrid models are a blend of both worlds, and they can be the solution you are looking for.
Explore ExpressIt’s logistics solutions today and experience the advantage of a hybrid 3PL for yourself.