Big shippers with plenty of pricing power are favoring third party logistics providers with heavy assets behind their name.
"Today, our worst service providers are (non-asset based) 3PLs," said Wayne Johnson, director of logistics for wall board manufacturer American Gypsum.
Speaking at the Transportation Intermediaries Association's annual meeting in San Antonio April 2, Johnson said carriers and asset-based 3PLs are the ones that are consistently providing flat-bed trailers on time at his loading facilities.
In addition, Johnson said, shippers shouldn't have to be saddled with inflated broker prices. "We're willing to pay a fair price at market rates."
Non-asset based 3PLs provide a valuable service by finding carriers and booking freight for smaller shippers or those with a decentralized distribution system, said Bo Pierce, vice president of logistics for Graphic Packaging International. But centralized manufacturers like Graphic Packaging, which has a $425 million annual transportation expense, "lend themselves to using asset based carriers," Pierce said.
"When you have 32 core carriers that you do $10 million to $20 million with a year, you need a commitment. Our business model doesn't work" with non-asset based 3PLs.