With so many options to choose from, it’s understandable to wonder which type of transportation provider is best for your company’s supply chain. Choosing poorly can create delays, communication issues, and impact your ability to deliver for customers.
Freight companies come in several different flavors, including asset carriers with brokerage authority.
For many, asset carriers with brokerage authority are the perfect solution, striking a balance between a freight broker’s reach and a carrier’s assets. But it can be hard to know if this kind of transportation provider will be right for your business.
Anderson Trucking Service (ATS), operates two companies that fit the asset-with-brokerage-authority mold — ATS, Inc. (our vans company) and ATS, Specialized Inc. (our open-deck company).
Decades of service in these areas has made us an expert in this model. That’s why we’re the right voice to tell you everything you need to know about this unique type of carrier — including the pros and cons of using one.
This article will give you the insights you need to confidently decide whether this type of provider can improve your transportation processes.
Key Takeaways
- Asset carriers with brokerage authority are hybrid providers that combine owned trucks and a carrier network.
- This reduces coverage gaps and delivers stronger service consistency.
- Trade-offs include less direct control and variable service quality on brokered loads.
- Pricing is asset-competitive, with market rates when brokered.
What Is an Asset Carrier with Brokerage Authority?
An asset carrier with brokerage authority, sometimes called an asset-based freight broker, owns a fleet of trucks and maintains a carrier network.
Traditionally, shipping solutions companies function as either a carrier or a broker, and need separate authority (and compliance) for each role:
- Asset authority is awarded to carriers that own a fleet of trucks and employ drivers. Customers work directly with asset carriers to move cargo, so they're motivated to provide a high level of service.
- Brokerage authority is awarded to companies that do not own a fleet or employ drivers, but act on behalf of their customers to broker freight to trusted carriers in their networks. A broker's network represents a wide pool of coverage options, so they are typically able to provide coverage more reliably.
An asset carrier with brokerage authority is a provider that holds both asset and brokerage authority.
When an asset carrier gets broker authority, they are essentially adding a new business function to their operations, which requires specific filings. While this additional documentation comes with extra compliance requirements, it also allows the provider to serve customers more flexibly.
Approaches to this hybrid model vary. Some providers will only broker freight to their network if asset capacity is not available and the customer has given their permission. Others will work with customers to determine a load percentage that must be moved by its own equipment, with the remainder being available for brokerage if need be.
Asset Carriers with Brokerage Authority: Pros & Cons
Essentially, asset carriers with brokerage authority have extra flexibility and resources to help customers find capacity and fulfill their commitments.
A true broker owns no assets, so its services are exclusively provided via third-party trucks. No trucks, no service — so brokerages must be diligent in building and maintaining a diverse carrier network if it wants to succeed.
On the other end of the spectrum, a true asset carrier relies exclusively on its trucks. That means if it commits to five loads but only has four available, it can’t haul those loads that day. This model doesn’t leave carriers much flexibility to move around trucks and drivers when necessary.
Asset carriers with brokerage authority avoid these pitfalls by using both models.
When they have capacity to meet a customer's needs in-house, they’ll use their assets to do so. When all their trucks are busy, brokerage authority allows them to use their carrier network to meet those needs — without sending business to another provider.
Pros
For shippers, working with an asset carrier with brokerage authority can be the best of both worlds. The pros of working with an asset carrier with brokerage authority include:
- Single source for both asset and brokered capacity
- Wider capacity pool = more reliable coverage than with pure asset carriers
- Stronger relationships than with pure brokers
- Flexible options = no compromising
At their best, asset carriers with brokerage authority offer the high service level of a true asset carrier and the wide carrier network of a true broker.
Cons
Still, no transportation provider model is perfect, or perfect for all companies. There are some downsides to working with an asset-based brokerage, as working with any kind of broker involves some risk.
The cons of working with an asset carrier with brokerage authority include:
- Less control: Working with a brokerage = outsourcing carrier vetting and selection
- Variable service reliability: Service quality on a brokered load is contingent on a third-party carrier's standards and reliability, not your broker's.
- Less visibility: Not all carriers are clear with customers regarding when, where, and how loads can be brokered, if at all
To help ensure your ultimate peace of mind and prevent your freight from getting brokered without your knowledge, be sure to ask any asset carrier with brokerage authority you’re considering about their specific procedures regarding brokering.
While it's considered best practice in the industry for asset carriers with brokerage authority to have a clear, mutually agreed-upon process outlining the circumstances under which a customer's freight can be brokered, not every provider plays by these rules.
Don't just assume your asset-based broker will check with you before brokering your freight. Discussed it and get an agreement in writing before awarding any freight to a provider using this model. Doing so will help you avoid uncomfortable (and potentially costly) situations later in your relationship.
Does Working with an Asset Carrier with Brokerage Authority Cost More?
Asset-based brokerage pricing is typically on-par with true asset carrier pricing.
If a carrier can cover 100% of a shipment with its own assets, they will often quote the customer a more competitive rate. If the carrier has to broker your freight, you’ll more likely receive a market rate plus the standard 10-15 percent brokerage fee.
With all that said, costs fluctuate due to factors like freight value, cargo dimensions, lead time, network fit, and capacity. The exception to this would be locked-in contract rates, which asset carriers offer to customers with whom they've built up a good working relationship over time.
To get a more concrete idea of what your shipping costs would be, you'll have to request a quote for your freight, including specifics like dimensions, lanes, equipment needs, etc.
How to Choose an Asset Carrier with Brokerage Authority
To choose an asset carrier with brokerage authority that will be a valuable addition to your existing freight network, you'll need to understand what your business's priorities are as it relates to shipping and find providers that can meet them reliably and transparently.
Ask yourself:
- Do you prefer asset coverage whenever possible, or is it more important that the load gets covered, regardless of carrier?
- Are there certain lanes that must have assets?
- If asset coverage is important to you, what equipment type(s) do you require?
- Under what circumstances are you comfortable with your freight being brokered?
Knowing the answers to these questions will help bring clarity to your search for an asset-based broker. Once you have an understanding of your needs, you can move on to finding and vetting providers.
At the most basic level, you're looking for a provider that has the network to cover your lanes and handle your freight type. But there are other considerations, both general and specific to the asset carrier with brokerage authority model, you should keep top of mind.
When choosing an asset carrier with brokerage authority, we recommend looking for:
- Transportation industry tenure (10+ years is best)
- Great reputation (Check out customer reviews and testimonials online)
- Transparency re: fleet size and ratio of company-hauled to brokered freight
- An explicit authorization requirement for brokering freight (So nothing happens without your express permission)
- Clear, rigorous carrier vetting processes
- Clean safety record
Trust between you and your provider is vital. Good communication and understanding both process and service expectations are key to your mutual success.
Build Out Your Shipping Network with Confidence
The strongest shipping networks are build on a foundation of provider diversity: asset carriers, brokerages, specialized providers, multimodal providers, and so on. Asset carriers with brokerage authority can be a valuable piece of that puzzle.
By leveraging the reliability and control of assets and the flexible capacity of a broker's network, you can achieve a smoother supply chain overall.
If you’re a shipper hoping to add a few asset carriers with brokerage authority to your freight network, consider checking out our Freight Carrier Vetting Guide. It’s a simple yet comprehensive checklist of everything you’ll want answered before you make your final decision.
