Part 3: What Type of 3PL Fits Your Needs?Written by Neal Willis
Due to the many variations of 3PLs that fall in between the two main categories of Asset Based and Non Asset based 3PLs, shippers sometimes question which type of 3PL they should choose. Circumstances play an important part in the answer to that question. Asset Based 3PLs typically offer the most comprehensive solutions, yet they are not always the most practical. Handling order fulfillment, freight forwarding, warehousing & distribution, transportation routing, carrier and fleet management, rate negotiations and sometimes even management of personnel, they tend to serve companies in critical markets, are usually more costly and involve contractual commitments.
An asset based 3PL can afford companies the ability the quickly scale their storage and distribution capabilities (up or down) and can be helpful in environments where geographic footprint can be subject to change rapidly. They tend to be more viable in time critical settings where cost isn’t necessarily the foremost concern, such as healthcare, and in situations where downtime is extremely costly, such as a manufacturing environment. Companies that employ an asset based 3PL may find it difficult to change to a different 3PL provider easily, since asset based 3PLs typically require contracts, some of which can be rather lengthy, and their services can be more complex and imbedded throughout an organization.
Non-Asset based 3PLs are probably the most common type of 3PL used by shippers as they frequently offer a variety of flexible services that can be engaged without much hassle. They operate in a multitude of environments and offer shippers a wide range of many of the same services that an asset based 3PL offers, such as freight forwarding, transportation routing, rate negotiations and administrative efficiencies without creating a huge barrier if a shipper should decide it’s necessary to change to a different provider in the future. Their systems applications and integrations can be fully customized and implemented quickly. They are viable in nearly any type of environment and shippers can use them as needed, with minimal or no contractual obligations.
A qualified 3PL supplier with a comprehensive suite of 3PL services at their disposal can help you solve the supply chain problems you deal with every day, however, the type of 3PL you should employ depends completely upon your specific industry and situation.