Simply saying, asset based 3PLs are those that own parts of a supply chain like vehicles and warehouses. Conversely, non-asset 3PLs don’t own any such equipment. Both have their own pros and cons, and it is difficult to tell which one is better than the other. Depending on where you work, you can choose any one of the two that suits your requirements the best. So, we have mentioned here the advantages and disadvantages of both so that you can decide better which one you must opt for. You must choose the one that meets your needs and offers expert solutions along with reliable customer service, who can serve you long-term with the ability to expand your business. One such name is Jayem Logistics, the leading 3PL service provider in India, where you can rest assured to get the best service and solutions for all your logistics.
Asset based 3PLs are economical
Asset based 3PLs provide low cost in warehousing and transportation as they have their own assets to offer. With their own assets, they can set their own prices without depending on a third party. Thus, you can hire an asset based company to take complete care of your supply chain at lower costs. On the other hand, non-asset based 3PLs do not have their own assets, thus it may get difficult at times to procure warehousing and transportation services from them at times, leading to not so cost-effective solutions.
Non-asset based 3PLs are more flexible
If you are looking for flexibility and customized solutions, it may get a little difficult with asset-based 3PLs as they have their own warehouses and trucks, due to which they can only create your logistics strategy to fit into their system. Conversely, non-asset based 3PLs will analyze your individual requirements and evaluate the best strategy for your business. They will be capable enough to design a supply chain that fit’s the specific needs of your company.
Asset based 3PLs are more reliable
Asset-based 3PLs have their own warehouses, vehicles and trained staff to handle the logistics of a company. On the other hand, non-asset based 3PLs outsource logistics responsibilities to other companies, which means there is less control over the logistics and more opportunities for errors. Moreover, asset based 3PLs allow the customers to look into the 3PLs infrastructure at any time, which will help companies to build trust for its 3PL.
To conclude, let us discuss in short the differences between the two types of 3PLs.
- Asset based 3PLs provide easy access to instant availability of warehouses, trucks and logistics, while non-asset based 3PLs provide greater flexibility in meeting diverse supply chain needs on case-by-case basis.
- Asset based 3PLs have high efficiency in managing all supply chain functions while providing lower costs with the use of sophisticated warehouse management systems. Non-asset based 3PLs on the other hand relies on personnel and work standards of various vendors, and the market may result in higher cost.
- Asset based 3PLs means dealing with only one company, thus resulting in low risk of errors, while non-asset based 3PLs serve as transportation consultants to determine the best method to move your inventory; however bringing in opportunities for error too.
Now, it is for you to decide whether you want an asset based or non-asset based logistics provider for moving your business ahead.