Asset Based or Non-Asset Based: Who to Choose?

October 3, 2011 by Frank Peditto

In the transportation industry, there are two primary types of companies, asset based and non-asset based. Asset based companies are those that own their own equipment. For example, in the niche of vehicle transportation, asset based companies own their own trucks and their driver’s work for the parent company. All of the operations are typically centralized through one primary dispatch. On the flip side are the non-asset based companies, of which ReloTrans® is one. Typically referred to as ‘brokers’, non-asset based companies do not own any of their own equipment, but rather partner with numerous carriers nationwide and even internationally.

From a service perspective, asset based providers may offer customers lower rates as they own their own equipment and, as such, sometimes have more flexibility in pricing, especially if they have a driver needing to get from one location to another and a customer with a parallel need. Some may argue that asset based providers also have more control over the service quality being that their drivers are employees of their company.

Non-asset based companies rely on their network or database of providers, which allows them to be 100 percent customer focused when selecting a carrier and driver for their customer. In many cases, they are also able to obtain bids from multiple providers, all of the same quality, to ensure that the customer receives the lowest possible cost. They are not limited by physical equipment or ‘assets’ and their capabilities are scalable based on the number of partners in their network.

While both types of companies have advantages and disadvantages, our recommendation to customers is to select the company that best meets their needs, not only in terms of the physical transportation of goods or vehicles, but also in terms of their business needs in reporting, communications and technology services. In this business it’s often said that, ‘you are only as good as your last move,’ and in today’s competitive landscape that is even more true.