3PL Perspectives
Robert Voltmann
President & CEO
Transportation Intermediaries Association
One of the hallmarks of TIA is the willingness of members to help each other succeed. From the very beginnings of the industry, members helped other members “do the business the right way.” Maybe because in those early days, the industry was held in such low esteem that members decided the only way to succeed was to work together to raise the bar. The success of these efforts is written large, with the industry now reaching $213 billion in gross revenue! The culture of working together and helping each other has been written into the industry’s DNA.
The hallmark of helping each other, whether its members volunteering their time to produce the annual Carrier Selection Framework, or members volunteering to write the curriculum for the TIA Leadership Academy, or members volunteering their time on the Technology, Programs, Education and Ethics Committees. Every day, TIA members help fellow members succeed.
To that end, a group of asset-based members got together to help write a best practice guide for running a brokerage within an asset-based company. While TIA has never been a carrier organization, we have, almost from the beginning of the association attracted, the logistics division of carriers wanting to “do the business the right way.”
The guide helps asset owners look at their logistics division differently than they do their carrier division. The guide begins with the very simple realization that the majority of employees in their asset division are operations-oriented, while the majority of employees in a logistics division are sales-oriented. The sales and compensation structures need to be different. An establishment of rules of engagement must be set in order to specify the circumstances and limitations between the two structures. Both asset and logistics divisions have their strengths, but to reach the full potential of both, a divide is needed.
It is important to view the logistics division as a separate profit center, not just a place to sluff off excess or undesirable freight. Asset-based companies need to decide whether or how the two sides of the business work together. For example, do the assets get first right of refusal on brokered loads, or do you completely separate the two businesses?
One of the main goals when starting a 3PL within an asset-based company is to manage a broader spectrum of transactions with shippers and expand your company’s portfolio. This expanded amount of transactions can lead to new opportunities in the industry and ultimately create lasting relationships while gaining an edge on the competition. With the industry currently increasing gross revenue every year, now may be the time to take the next steps in evaluating staff and overall company development. The information provided by TIA and industry leaders in this best practice guideline for asset-based companies will help accelerate the path to success through the guidance and tools used every day by industry experts.
