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Gaskins: Does private fleet or carrier make more sense for your business?

May 28, 2024
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 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.

About the Author

Patrick Gaskins | Senior vice president, Fleet Solutions

Patrick Gaskins is a financial services professional serving the transportation industry for over 30 years. Gaskins earned his BBA in Finance from the University of Miami, FL in 1989, and received his CTP certification from the National Private Truck Council in 2002. He has held positions with GE Capital, TCF Equipment Finance, and various small independent lessors. 

He began his career with Corcentric in 2010 as Vice President of Financial Services, was promoted to Senior Vice President of Sales and Operations, and is now taking the role of Senior Vice President, Fleet Solutions.  In his new role he will lead Corcentric’s Captial Equipment Solutions, Fleet Procurement, Supply Management, and Remarketing teams. Gaskins will bring to the Fleet practice his expertise in developing data driven solutions to complex transportation transactions, driving efficiencies, and reducing expenses for Corcentric’s customers.

The Fleet Solutions practice leverages technology and the purchasing power of over 1,700 member fleets operating approximately 800,000 assets to provide its members with access to cost effective national account purchasing programs, fleet financing, asset management, and remarketing services.

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