An asset-based carrier owns and operates its own fleet of trucks while a freight broker works with outside contractors. Both types of carriers have their place, and it comes down to your specific needs in selecting the right provider.
Below, we break down the differences between these two services and guide you through the process of determining which one is right for your business.
What is an Asset-Based Carrier?
An asset-based carrier is a transportation company that owns and operates its fleet of trucks, trailers, warehouses, and other equipment. This ownership of physical assets allows the carrier to have more control over the logistics and execution of your shipments. Working with an asset-based carrier can provide more streamlined communication and potentially more reliable service.
What is a Freight Broker?
In contrast, a freight broker is an intermediary that does not own any trucks or assets of its own. Instead, brokers partner with a network of carriers—often owner-operators or third-party trucking companies—to move freight on behalf of shippers. The broker’s primary role is to source the right carrier for your shipment, ensuring that your freight is picked up and delivered on time, and providing support throughout the process. Brokers have the flexibility to work with various carriers, which allows them to offer a wide range of solutions for different shipping needs.
5 Key Differences Between Asset-Based Carriers and Freight Brokers
1. Ownership and Control
- Asset-Based Carrier: They own the trucks, trailers, and equipment they use to transport goods. This ownership allows them to have greater control over the logistics of your shipments, including the quality of their equipment and the training of their drivers.
- Freight Broker: Brokers do not own any trucks. They work with a network of carriers and are responsible for sourcing and coordinating the best carrier for your needs. While brokers manage the relationship, they don’t control the actual transportation.
2. Flexibility and Adaptability
- Asset-Based Carrier: Since asset-based carriers control their fleet, they can offer more direct flexibility in scheduling and rerouting shipments. If changes need to be made, they have the authority to adjust their drivers’ routes or schedules quickly.
- Freight Broker: Freight brokers have a wider pool of carriers to choose from, allowing them to find alternatives if needed. However, they might not always be able to make quick adjustments if a carrier is unavailable or if schedules change unexpectedly.
3. Scalability
- Asset-Based Carrier: If your shipping needs increase, an asset-based carrier will need to invest in more trucks, hire additional drivers, and expand its infrastructure. This can take time and may involve additional costs.
- Freight Broker: Freight brokers typically have an easier time scaling. Since they work with a variety of carriers, they can quickly adjust the number of trucks or the size of the fleet based on demand, without needing to invest in additional assets.
4. Quality Control
- Asset-Based Carrier: Because they own and operate the equipment, asset-based carriers have more direct control over the quality of their service, including vehicle maintenance and driver training. This can help ensure a higher level of consistency and reliability.
- Freight Broker: While brokers don’t directly control the carriers, reputable brokers carefully vet the carriers they work with to ensure that they meet industry standards. However, because they rely on external companies, there may be some variability in service quality.
5. Pricing
- Asset-Based Carrier: Asset-based carriers often have more control over their pricing because they own the trucks and equipment. This can sometimes result in more competitive pricing and less markup, as they are not acting as a middleman.
- Freight Broker: Freight brokers generally charge a markup for their services, which can make pricing appear more variable. However, brokers often have access to a broad network of carriers, which can help find competitive rates and better options for specific needs.
Which Should You Choose: Asset-Based Carrier or Freight Broker?
The decision to use an asset-based carrier or a freight broker depends on your specific needs and the nature of your shipments. Here are some factors to consider:
- Location and Timeliness: If you have tight deadlines or need to ship freight in specific regions, an asset-based carrier may offer more control and reliability. However, if your shipping locations are more flexible or you need a broader network, a freight broker can help find the right carrier.
- Scalability: If you anticipate fluctuations in demand or seasonal changes, a freight broker may provide the flexibility to scale your shipments up or down without the need for additional investments in assets.
- Budget: If cost is a primary concern and you’re shipping regularly along specific routes, an asset-based carrier may provide a more predictable pricing structure. On the other hand, if you’re looking for variety and potentially better deals, a freight broker may help find the best rates based on their network of carriers.
- Service and Quality Control: If you require more consistent service and prefer to work with one company that manages everything, an asset-based carrier may be the better option. However, if you need a wide variety of options and can trust the broker’s vetting process, a freight broker can help meet your needs.
Takeaway
In most cases, there isn’t a one-size-fits-all answer. Both asset-based carriers and freight brokers offer distinct advantages depending on your specific freight needs. Often, businesses find value in using both services at different times, depending on the situation. For instance, even if you typically rely on an asset-based carrier, having a freight broker on standby can provide extra flexibility and serve as a backup plan when things change.
At Valley, we offer both asset-based carrier services and freight brokerage solutions to meet your diverse shipping needs.
Need to move freight? Click here to learn more about our transportation services and how we can help you find the right solution for your business.
