Your Ultimate Guide to Freight Brokers vs Asset-Based Transportation Companies

Created on: July 4th, 2024
Categories:Freight Management

Whether it’s the ends of the earth or just a neighbouring city, no matter what destination your package needs to reach, there’s always a perfect solution out there that’ll get it where it needs to be.

And when it’s time to send off that package, you might ask yourself “Should I look for freight brokers or asset-based transportation companies to take care of it?”

To finalize what the better choice is, you need to know the differences first—so here’s the gist of it: 

Freight brokers are the ones who facilitate connections between shippers (companies needing to transport goods) and carriers (companies providing transportation services) without owning the vehicles used for transportation. On the other hand, asset-based transportation companies own & operate transportation assets and oversee the direct transportation of goods.

And there’s much more to it than that—keep reading to take a deep dive into FMi Logistics’ ultimate guide to freight brokers vs asset-based transportation companies

Table of Contents: Your Ultimate Guide to Freight Brokers vs Asset-Based Transportation Companies

1. Freight Brokers vs Asset-Based Transportation Companies

  • Role and Function
  • Responsibility and Liability
  • Customer Interaction
  • Flexibility and Scalability 

2. The Ideal & Logical Solution: FMI Logistics 

  • What is Logistics?

3. Free Yourself From Freight and Transportation Worries with FMi Logistics

The Key Differences Between Freight Brokers and Asset-Based Transportation Companies

In 2022, the size of the Global Transportation Industry Market soared to USD 7.31 trillion. By 2030, that number is expected to hit a whopping USD 11.1 trillion. This industry became the powerhouse it is today because of the many key players that fulfill their distinct roles to a tee—and freight brokers & asset-based transportation companies are among these game changers. 

Discover the key differences between the two below: 

Role and Function  

Freight Brokers: The term “broker” says it all—these experts specialize in negotiating or arranging transactions between companies that need to transport their goods (shippers) and companies that provide transportation services (carriers).

As intermediaries between shippers and carriers, freight brokers don’t own any vehicles or transportation assets themselves. Instead, it’s the matching of the shippers with the right carriers that they take care of. With freight brokers having extensive connections in the industry, this opens up endless options for shippers to find the ideal carrier for their transportation needs.

Asset-Based Transportation Companies: These businesses go by many names, and so you might also know them as “asset carriers” or “asset-based trucking companies.” What mainly sets these companies apart from freight brokers is that they actually have direct ownership over transportation assets, such as trucks, ships, planes, or trains. You can count on them to directly handle the movement of goods from one location to another. Some companies also offer additional services like warehousing, logistics management, and customs clearance. 

Responsibility and Liability 

Freight Brokers: Because they are not directly responsible for the physical transportation of goods, the liability of freight brokers is often limited to just the brokerage aspect of the transaction. Their primary role involves focusing on the arrangement of transportation services and negotiating contracts between shippers and carriers. 

Asset-Based Transportation Companies: As the owners and operators of transportation assets, shipping companies bear direct responsibility for the safe and timely delivery of goods. As such, they assume liability for any damages, delays, or losses that may occur during transit.

Customer Interaction 

Freight Brokers: As the expert “middle person” in the transportation industry, freight brokers typically interact with both shippers and carriers to facilitate transactions and ensure the whole process runs smoothly. Typically, they also negotiate rates, coordinate shipments, and handle administrative tasks such as paperwork & documentation.

Asset-Based Transportation Companies: Opting for these companies means direct interaction with the team that’s providing transportation services and managing the movement of your goods from one point to another. Some businesses also offer services, such as liaising with customs officials, warehouse operators, or other entities.  

Flexibility and Scalability

Freight Brokers: Many companies choose to work with freight brokers because of the immense flexibility that comes along with it. Because these companies source transportation services from a network of various carriers, shippers obtain instant access to a wide range of options—and so the chances are much higher that they’ll find the best solution for their specific needs. In terms of scalability, freight brokers can easily amp up their operations by expanding the network of carriers that they work with. 

Asset-Based Transportation Companies: While these companies typically offer a variety of transportation options, the range of options that they can offer their clients is limited by their own fleet. To scale up their operations and expand their catalogue of service offerings, they would need to invest in additional transportation assets.

The Ideal & Logical Solution: FMi Logistics in Canada

Will you be opting for the various transportation choices that freight brokers bring to the table or are you leaning more toward asset-based transportation companies which offer direct communication?

We’re here to tell you that you don’t have to choose between the two—instead, you can harness the power of both methods. 

That’s exactly where trusted logistics companies come in to solve the equation.

Here’s how that works: In a nutshell, freight brokers focus on connecting shippers with carriers, asset-based transportation companies own the means of transportation and carry out the physical shipping of goods, and logistics companies provide broader supply chain solutions that often include the services of freight brokers and shipping companies as part of a more comprehensive package.

What is Logistics? 

Logistics encompasses the entire process of managing how resources are acquired, stored, and transported to their final destination. Beyond transportation alone, it involves the integration of information, inventory, warehousing, material handling, packaging, security, and even returns. All of this is achieved through strategic planning and coordination. 

FMi Logistics’ Services 

Looking for a company that offers this all-in-one solution and delivers goods safely & on the dot?

The FMi Logistics team, Canada’s most trusted logistics partner, is here for you. 

Known for providing responsive service, dedicated and reliable carriers, personalized attention from real people, consistent communication, competitive pricing with transparent rates, and an experienced warehouse team, having us behind you means you never have to worry about whether your goods are receiving the best care. 

Take a closer look at the top-tier services we offer:

Free Yourself From Freight and Transportation Worries with FMi Logistics

Ready to experience logistics in Canada that never get the hiccups? 

Find the ideal solutions that are tailored to your specific business needs right here at FMi Logistics. 

Start freeing yourself from freight and transportation worries. Contact us today to get started! 

FMi Logistics Team
FMi Logistics Team
Our team, comprising seasoned professionals, is dedicated to offering a range of services including freight management, warehousing, distribution, and supply chain management. We specialize in creating customized solutions that meet the unique needs of our clients, ensuring their goods are transported safely, efficiently, and sustainably. At FMi Logistics, we are committed to leveraging the latest technology and industry best practices to deliver excellence in every aspect of our services. Our insights and updates in the logistics field are driven by our passion for excellence and our commitment to helping businesses succeed in a dynamic global market.

Contact Us

No matter your business needs, FMi Logistics is here to serve you. Contact us today to learn more about how we can help you.

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