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    ATS Transportation Blog

    Freight Broker vs. Asset Carrier: What Logistics Provider is Right for You?

    This always seems to be a topic of discussion in our industry with no clear-cut solution. You may be left wondering, “Should I use a freight broker or asset carrier?” Whether you ship high volumes of freight or move a load every now and then — or even somewhere in between — this can be a tough question to answer. How can you find the best value while ensuring your freight is delivered safely and on time?

    Let’s start by defining each:

    A freight broker acts as an intermediary between a shipper and a transportation provider. They agree to arrange loads for a shipper and find an available truck and trailer, or more if needed, by contacting one of their partner carriers. Freight brokers do not own their own equipment.

    An asset carrier owns and operates the tractors and trailers in their fleet and employs the drivers that move the freight. The shipper works directly with the carrier when they need freight moved.

    As an asset carrier that was founded in 1955 with a freight brokerage sister company for the past three-plus decades, we understand the pros and cons of working with each. In this article, we will help you find the right fit for your specific needs. 

    We’ve identified seven key categories that matter to you, as a shipper, and break down how an asset carrier and brokerage handle them:

    1.     Coverage
    2.     Flexibility
    3.     Adaptability
    4.     Quality
    5.     Responsibility
    6.     Drop-Trailer Service
    7.     Pricing

    1. Coverage

    While an asset carrier controls where their trucks go, they are at the mercy of where the trucks happen to be located when you need them. For example, if you need a load to be picked up in Salt Lake City tomorrow, but your asset carrier’s closest truck is in Kansas City, that could present a challenge.Logistics Planning Map Blog

    A brokerage can utilize their vast network and technology tools to find a carrier in the right area with the right equipment on the right day for the job. That load in Salt Lake City may have a dozen trucks that fit your needs nearby, making it much easier to say yes and cover your load.

    2. Flexibility

    Because asset carriers own the trucks, they have direct control over where those trucks go. If something comes up and they need to adjust, they can call their driver and tell them to head in a different direction.

    While brokerages don’t have direct control over each and every truck, they can ask the driver assigned to the load if they’d be willing to change destinations. If the driver chooses not to, the brokerage can quickly call a different carrier and have them pick up where the other left off.

    3. Adaptability

    While an asset carrier can buy more trucks and hire more drivers to adapt to your increased demand, that’s easier said than done. That adds overhead, which means increased risk if your demand drops off in the future because that truck and driver will have to find other freight to keep them busy. There’s also the current challenge of finding qualified drivers with the current driver shortage.

    Whether your demand drastically increases or decreases, a freight brokerage can usually adapt. They can either call up a carrier (or more if needed) and get coverage quickly or back off if your demand goes down.

    4. Quality

    Gallery-Images38

    Asset carriers, of course, own their equipment, so they have direct control over the level of quality you’ll get. The same can be said for the drivers behind the wheel. Because they are responsible for hiring them, they can set certain standards that the drivers must maintain in order to keep their job. Whether or not those standards live up to yours is up to you.

    While brokerages don’t have direct control over the carrier’s equipment or safety standards, good freight brokerages will have an internal platform that tracks authority status and insurance levels of each carrier. They’ll use their experience with carriers on past shipments, including on-time delivery records and more. If the carrier isn’t living up to the standards of the brokerage, the brokerage can choose to stop working with that carrier.

    5. Responsibility

    An asset carrier generally puts their name and logos all over their equipment, so there’s a direct responsibility to live up to their brand. If, or when, something goes wrong, there’s an expectation that they’ll step up because they feel the responsibility to solve the problem.

    Because a brokerage doesn’t own the equipment they use, it’s a lot easier to run and hide when something goes wrong. However, if you find a brokerage you can trust, they’ll step up to the plate when you need them to and use the many tools available to fix the problem.

    6. Drop-Trailer Service

    Drop-trailer service is when a driver leaves a trailer with a shipper for an extended period of time, until they, or another driver, pick it up on a later date. This allows the shipper to load and/or unload at their own pace.Drop-Trailer-Service

    Drop-trailer service is a fairly common practice on the asset side. Many of the best asset trucking companies have a high trailer to truck ratio, so they can afford to leave a trailer with you for an extended period of time if needed.

    While it’s a newer practice on the brokerage side of things, drop trailer service is starting to become an option, especially with brokerages that have direct relationships with carriers that specialize in this service.

    7. Pricing

    Asset carriers control their prices based on the value they feel they can provide you. Because the revenue goes straight into their pocket, there may be less “markup.” It also means they can adjust prices, if needed, without needing to call the carrier to find out if they can manage the adjusted price and then get back to you. They know what prices they can take firsthand.

    A brokerage has a vast network of different carriers, some of which will be more affordable than others. If price is a leading factor for you, they may be able to find a lower-cost solution easier. However, you may risk an inconsistent quote if the brokerage can’t find a carrier that fits into the price they offered you.

    Experienced freight brokerages are more likely to stand behind their initial quote because they probably already know what it will cost them, plus they have the integrity to deliver on their promises to you.

    Freight Brokerage vs. Asset Carrier: What’s the Best Solution?

    All things considered, you should probably use both. A freight brokerage has the edge when it comes to flexibility and adaptability to adjust your changing needs, wherever you are. They may also be able to find you the cheapest price if that matters to you. However, an asset carrier owns and operates their own equipment, so they can more readily provide you drop-trailer service and will be more likely to stand behind their work, even if something goes wrong.

    The real key is finding an asset carrier and freight brokerage you can trust. If you have faith in their quality, safety and/or hiring standards, you can trust your freight will be in good hands, whether or not you know firsthand the name on the truck that’s pulling your freight.

    While it isn't as common, there are transportation providers that can do both. That will provide you one point of contact that can deliver on whatever transportation needs you have, every time.

    Tags: Transportation Services, Transportation Solutions, Freight Brokerage, Peak Season Shipping, Asset-Based Carrier

    Jerry Ramirez

    Written by Jerry Ramirez

    Jerry joined ATS in 2003 and has served in various roles over the years, including time as a customer service manager in ATS’ Vans division. Now as an operations manager with ATS Logistics, Jerry works to develop employees and grow relationships with customers, focusing primarily on the specialized and heavy haul side of the business.

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