You have some gaps to fill in your carrier network, but only want to onboard the right fit. Who ya gonna call?
With so many options to choose from, it’s understandable to wonder which type of provider is best for your company’s supply chain. Choosing the wrong transportation partnerships can create shipping delays, impacting your ability to deliver for customers.
Freight companies come in several different flavors, including asset carriers with brokerage authority.
For many, asset carriers with brokerage authority are the perfect solution — striking a balance between a freight broker’s reach and an asset carrier’s. . . well. . . assets.
But is this kind of transportation provider right for your business?
Anderson Trucking Service (ATS), operates two companies that fit the asset-with-brokerage-authority mold — ATS, Inc. (our vans company) and ATS, Specialized Inc. (our open-deck company).
Decades of service in these areas has made us an expert in this biz (and company structure). That’s why we’re the right voice to tell you everything you need to know about this unique type of carrier — including the pros and cons of using one.
Read on to learn more about what it means to work with asset companies that also have the authority to broker your freight. This article will give you the insights you need to confidently decide whether these providers can improve your transportation processes.
P.S. Stick around to the end, where you’ll learn some tips for choosing one of these carriers.
Without further ado, let’s get our assets in gear and start brokering straight facts:
- What is an asset carrier with brokerage authority?
- How is an asset carrier with brokerage authority different from asset carriers and freight brokerages?
- What are the advantages of working with an asset carrier with brokerage authority?
- What are the disadvantages of working with an asset carrier with brokerage authority?
- What does it cost to work with an asset carrier with brokerage authority?
- What should shippers consider when choosing an asset carrier with brokerage authority?
What is an Asset Carrier with Brokerage Authority?
First, let’s make like Webster and define some terms. Shipping solutions companies can hold either asset authority or brokerage authority. These describe the business models that shipping companies are authorized to implement.
An asset carrier owns trucks to transport customer freight. Customers work directly with them to get cargo from Point A to Point B. This means asset carriers often provide a high level of service to ensure customer loyalty and satisfaction.
A brokerage will act on behalf of its customers to broker their freight to carriers. Brokers do this by leveraging a carrier network, which enables more reliable coverage.
“But Derik,” I hear you crying, “what if a freight company isn’t really either of those models, but offers the benefits of each?”
Well, to that I say: You’ve just described an asset carrier with brokerage authority.
An asset carrier with brokerage authority owns trucks and has a carrier network it can work with if the customer gives approval.
Asset carriers with brokerage authority vary in their approaches to this hybrid model.
Some will only act upon their brokerage authority if the customer has indicated it is their preference when asset capacity is not available.
Others will work with customers to determine a certain load percentage that must be moved by its own equipment, with the remainder being available for brokerage if need be.
How is an Asset Carrier with Brokerage Authority Different from Asset Carriers and Freight Brokerages?
Essentially, asset carriers with brokerage authority have extra flexibility and resources to help fulfill customer commitments.
A true broker owns no assets, so its services are exclusively provided via third-party trucks. No trucks, no services — so brokerages must be diligent in building and maintaining a diverse carrier network if it wants to succeed.
On the other end of the spectrum, a true asset carrier relies exclusively on its trucks — which means if it commits to five loads but only has four available, it can’t haul those loads that day. This model doesn’t leave carriers much flexibility to move around trucks and drivers when necessary.
Asset carriers with brokerage authority avoid these pitfalls by using both models.
When they have capacity to meet a customer's needs in-house, they’ll use their assets to do so.
When all its trucks are busy, brokerage authority allows it to use its carrier network to meet those needs — without sending business to another provider.
What are the Advantages of Working with an Asset Carrier with Brokerage Authority?
Working with an asset carrier with brokerage authority — rather than one of the “true” models — enables shippers to develop personal relationships with a single-source provider without compromising on coverage. They offer the high service level of a true asset carrier and the wide carrier network of a true broker.
To quote Miley Cyrus’ blonde-streaked alter-ego, “it’s the best of both worlds.”
What are the Disadvantages of Working with an Asset Carrier with Brokerage Authority?
There’s no getting around having to work with a provider, be it an asset carrier or a broker. Working with an asset carrier with brokerage authority means you don’t have to decide between the benefits of these two types of providers.
It can also help safeguard against many of the “true” models’ respective disadvantages. Because of this, working with an asset carrier with brokerage authority tends to deliver more benefits than it does downsides.
Still, any time a shipper works with any kind of broker, there is risk involved. Shippers give up the ability to hand-select their solutions and personally manage any issues that may arise, so they’ll have less control over their supply chain.
And speaking of control: While it’s best practice for transportation companies to be on the same page as their customers as to when, where, and how loads can be brokered, if at all, not every carrier plays by these rules.
To help ensure your ultimate peace of mind and prevent your freight from getting brokered all William Nilliam (Willy Nilly to his friends), be sure to ask any asset carrier with brokerage authority you’re considering about their specific procedures regarding brokering.
Look for carriers that will require explicit authorization from you before brokering your freight, so nothing happens without your say-so.
Trust between you and your provider is vital. Clear communication and understanding of both process and service expectations are key to your mutual success.
What Does It Cost to Work with an Asset Carrier with Brokerage Authority?
In general, pricing is competitive with other true asset carriers. Of course, costs will fluctuate due to factors like freight value, cargo dimensions, lead time, network fit, and capacity. Needs a carrier can meet using 100 percent owned assets often get a more competitive rate.
If the partnership isn’t an ideal fit, or the carrier has to go to market, you’ll more likely receive a market rate plus the standard 10-15 percent brokerage fee.
What Should Shippers Consider When Choosing an Asset Carrier with Brokerage Authority?
If you’re a shipper considering an asset carrier with brokerage authority, might I direct you to our Freight Carrier Vetting Guide? It’s a simple yet comprehensive checklist of everything you’ll want answered before you make your final decision.
In general, you’ll want to partner with a carrier whose network can handle your lane(s) and load(s) well.
But you should also look for a carrier with deep industry experience, a high level of credibility, and a stellar reputation. Transparency re: truck counts and the ratio of company hauled to brokered freight is a good sign of a trustworthy carrier!
Now that you’re armed with knowledge, are you ready to start requesting quotes from asset carriers with brokerage authority? Practice on us! (We don’t bite, promise.) Contact ATS today to get more information about our services and pricing.
You can also explore our Freight Rate Spot Quote Tips blog to learn all about rate quotes, best practices, and more.
