| are not sure of what a 3PL service is then give me a | | | | pose a problem when it comes to handling claims |
| minute to elucidate it simply. A third party logistics | | | | resolution if they are using their own trucks and |
| servive or 3pl as they are referred to is a service | | | | equipment. What would you do if you had a claim on |
| that acts as a negotiator between a business that | | | | damaged freight, would you feel at ease knowing |
| does plenty of LTL with the trucking carriers. Why | | | | that your claim would be resolved in the shortest |
| would someone want to get involved with a middle | | | | time and reimbursed for the highest value possible? |
| man? It is as uncomplicated as this, experience, | | | | Non Asset Based 3PL |
| cheaper pricing and service. A 3pl allows a small | | | | This 3PL handles all of the duties of a third party |
| business that normally would not get decent shipping | | | | logistics service such as quoting freight, booking |
| discounts from the LTL carriers to all of a sudden be | | | | pickups and deliveries, routing, and auditing, but |
| able to compete with some of its large competitors. I | | | | doesn't tie up all of its cash all of the transportation |
| guess you can describe it as "Sams Club" pricing for | | | | assets that an asset based 3PL would own. Instead, |
| shipping and transportation costs. | | | | this type of 3PL usually possesses only desks, |
| Now that we have explained what a third party | | | | computers, and freight industry expertise. Now you |
| Logistics Company is... should your business partner | | | | can see why they are referred to as |
| with an asset based or a non asset based 3pl? Let's | | | | “transportation consultants”. |
| discuss these in detail so that you feel comfortable | | | | Here is something to think about, since a non asset |
| moving forward. | | | | based 3pl is not limited to using any particular |
| Asset Based 3PL | | | | warehouse or transportation company and usually |
| An asset based provider has much of its resources | | | | have no ties to carriers, they are now able to use |
| tied up into "assets". These assets may include | | | | their ability to negotiate the best deal for your |
| anything that is involved with supply chain | | | | business. Negotiations will be done with the top value |
| management, including technology systems, truck | | | | oriented carriers that meet your criteria and then you |
| fleets, vehicles, aircraft, warehousing facilities, packing | | | | get to choose which carriers to partner with. |
| and unpacking equipment, forklifts etc. As a result | | | | Since there is no conflict of interests here, there is |
| you would be restricted to sticking with the assets | | | | also no anxiety about resolving any claims that you |
| that this third party logistics service suggests. I agree | | | | might have either. Now you can see why many |
| that you will see some savings here but here is a | | | | companies choose to team up with a non-asset |
| question to think about: How do I ultimately know I | | | | based provider. They understand that they now |
| am getting the best value available out there? | | | | have the unlimited freedom to choose the service |
| Can you also see how this conflict of interests could | | | | providers that best meet their needs. |