Does the company you are thinking of doing business with own a truck? Perhaps it is a freight forwarder or a motor carrier. You may be wondering, do they have a truck that they used to bring shipments to their customers? They may not have a large truck, but they may have a small truck that they use when they do deliveries out of town.
Sometimes a company may own a small truck used to haul freight from one location to another. It could be that a company only uses one type of truck regularly. It may only be used to haul goods that they buy in bulk, or it could be that they only use small trucks for single loads. A truck like this could be owned by a company just doing local deliveries, or it could be owned by a company that does international shipping.
What does the company that owns the truck do?
Many freight forwarders lease their trucks. This means that the truck will be in their name, and they will keep the monthly payments. The company may also provide insurance on the truck and a depreciation deduction for the actual cost of the truck. There may also be other charges involved for the use of the truck, such as warehousing fees.
If a freight forwarder leases a truck, they may also own that truck. For some companies, it makes more sense to lease a truck. They may own trucks that were paid for in cash, and therefore they do not have to worry about paying depreciation, and they may not have to worry about paying monthly payments. Many times, they may not have the current depreciation value of the truck to insure.
When a company purchases a cargo van from a freight forwarder, they are making a significant commitment. The truck may need repairs for several years while the company is using it. After several years of using the van, the truck may need minor cosmetic upgrades or repairs before it is used once again.
So why would a freight forwarder own a truck?
Some may own trucks because they can afford them. Others may own trucks because they work with the customer daily and become accustomed to how they want their van and what they want from the business.
Another reason a freight forwarder may own a truck is that the customer is constantly changing their needs. Maybe the customer travels a lot and needs a large van with a full-size bed for extra sleeping space. Perhaps the customer is moving out of state and needs a smaller compact truck with enough room for belongings. These situations change the needs of a truck daily, and a freight forwarder must keep up with those changes to properly service their customers’ needs.
Do Freight Forwarders own trucks?
So, the question “Do Freight Forwarders own trucks?” is legitimate to answer depending on the circumstances. When a business is growing very rapidly, some may own multiple trucks to meet the demands of the expanding business. Others may have one large van that they use when transporting goods from point A to point B. Regardless of the situation, all businesses require more commercial vehicles to meet their daily operations. As long as everyone is paying the same amount for their vehicle(s), there should be no sense in owning more than one vehicle for business use.
Another reason someone may ask, “Do Freight Forwarders own trucks?” is simply because a customer needs a specific vehicle and cannot locate it in the company’s existing inventory. Depending on the customer’s needs, the company may have multiple options to satisfy the customer’s needs, but it may not be possible for the company to store the vehicle.
For example, say the customer wants to rent a truck that has already been used by a company that transported his company’s products. If the company has stored the vehicle at a truck lot, it may be impossible to find another company that will rent the vehicle to fulfill the customer’s needs. The customer may end up having to pay a higher fee or take his merchandise elsewhere if he cannot find another business to rent the truck for his delivery needs. On the other hand, if he could find another business that needed the truck, he would probably be charged a higher fee. Either way, the customer may end up paying more than necessary for his merchandise.
Whether a company owns or uses a freight forwarder, the company needs to determine whether it has access to a specific type of merchandise. Businesses can often make good use of a freight company even if they do not own the trucks themselves because they need access to get to remote locations. Freight forwarder’s trucks can be helpful when a company needs the ability to move merchandise fast; however, a freight forwarder’s sole purpose is to transport freight.