Gaskins: Does private fleet or carrier make more sense for your business?
Private fleet versus carrier, the age-old question, which is a better solution? As with most things in transportation, the answer always comes down to it depending. Every shipper has unique needs and, in most cases, it’s not a choice of one versus the other; it is rather what is the right mix.
Private fleets are a perfect solution for distributors, manufacturers, and route delivery operations. These are predictable needs and the driver, your employee, is more of a customer-facing route salesperson rather than the traditional driver. As “last mile” operations become more prevalent in the market, so do private fleets. But like anything else, there are both pros and cons:
Pros of private fleets
- The ability to brand your fleet and use it for marketing
- Ultimate control over routes and delivery times, which are keys to customer service
- Control over all of the costs associated with the fleet
- Guaranteed capacity
Cons of private fleets
- Significant investment in equipment, systems, and personnel to operate efficiently and cost-effectively
- Guaranteed capacity also means you cannot easily reduce your fleet when you have excess capacity
- Liability exposure
See also: 2024 FleetOwner 500: Top Private Fleets
Why outsourcing is often the choice a company makes
Outsourcing of transportation comes in different forms, such as full-service leasing, dedicated logistics, and the use of pure for-hire carriers. In many cases, the product being transported will also play a role in what form of transportation a company will use. Many companies outsource because they feel keeping up with new truck technology and the training required to utilize that technology is both expensive and time-consuming.
Outsourcing your transportation and logistics is not always the most efficient or lowest-cost option. When capacity is readily available, rates are low. When capacity is constrained, rates can get extremely high. Look back to how high ocean shipping rates got after the pandemic. There are always cycles, and budgeting for those cycles can be problematic.
Carriers can be used for the movement of almost all freight, from runs across town to anywhere in the world. For small or mid-sized businesses working on growth, carriers may be the logical choice. But larger companies can use carriers as well, even if they already have a private fleet. Working with a carrier allows for scalability since some businesses have seasonal spikes where they need more capacity than they have in their existing fleet. This short-term solution enables shippers to still satisfy their customers (who expect timely delivery) without capital investment in vehicles that may be dormant for a good part of the year.
What’s clear is that there isn’t a one-size-fits-all solution for everyone. It’s up to the shipper to assess what works best for both profitability and productivity.
