Shipping Logistics Software: Frequently Asked Questions

In lieu of staffing a logistics department, many shippers turn to Third Party Logistics (3PL) providers to secure the best carrier arrangements. However, depending on the type of shipping management you need, 3PL can be as costly as staffing in-house experts. It can also make you feel distanced from the distribution process.

Instead of using 3PL, many businesses now use shipping logistics software – a class of applications that perform the logistical analysis traditionally performed by experts. If you are considering the software as an alternative to 3PL, but you have questions about its benefits and applications, the answers below can be helpful:

How much knowledge is required to operate the applications?

Ideally, the user should have a proficient understanding of transportation logistics, but a consummate understanding of logistical analysis is unnecessary. After performing logistical analysis based on the data you supply, the applications provide you with a list of recommended options via a user-friendly interface.

How much can the applications reduce the cost of freight transportation?

Research shows that top-notch shipping logistics software can reduce the cost of freight transportation by ten percent in the first year. Depending on your transportation process, the percentage could be even higher.

Can the applications support a transportation management system?

TMS software can support a Transportation Management System (TMS) by helping shippers perform the crucial processes of freight transportation management: planning and deciding on transportation arrangements, monitoring the transportation process, and measuring Key Performance Indicators (KPIs).

Are applications available that support LTL transportation?

Yes. The applications can be designed to support any freight transportation need, including LTL transportation. If you routinely ship partial loads, LTL software can help you identify more affordable transportation arrangements than Truck Load (TL) or parcel shipping.

Are the applications available on a web-based model?

Yes, the applications are available on a web-based model. They are also available on an in-house model. Most shippers choose the latter due to its cost effectiveness and the ability to access the application remotely.

How much do the applications cost?

The cost of the applications depends on several factors, particularly whether it is implemented on an in-house, or a SaaS (Software as a Service) model, along with the logistical options you need. The best way to receive an accurate cost assessment is to have a provider of logistics software review your freight transportation process and administrative needs.

What if the transportation process changes after implementing an application?

The application you implement is not set in stone. If you experience new shipping needs, you can add new logistical options to the existing system. In terms of adding new options, implementing a web-based application typically offers the most flexibility.

Conclusion

Shipping logistics software is a cost effective alternative to staffing experts or contracting with a 3PL provider. Unlike 3PL, it puts you in direct control of freight transportation, helping you identify the best transportation arrangements in terms of freight safety, delivery time, and transportation cost. To learn more about the benefits of TMS software and other types of logistics software, contact a provider of web-based logistical solutions today.

How Does TL Logistics Software Compare to Other Logistics Options?

When a company needs to ship its goods form point A to point B, finding the best shipping arrangement is rarely as simple as contacting the nearest carrier and signing a contract. On the contrary, most shippers require the aid of in-house logistics experts, third-party logistics (3PL) providers, or logistics software to arrive at the right shipping plan in terms of delivery time and cost. However, there’s a big difference between hiring an in-house logistics expert, hiring a 3PL provider, or implementing logistic software. So, which one offers the most benefits to the most shippers? To answer this question, it helps to explain how each of these options operates within the shipping process.

A logistics expert’s place within the shipping process is fairly obvious: for roughly $80,000 a year, he or she manages a company’s shipping process and proposes newer, better shipping solutions when possible. The upside side of hiring an in house expert is that you have a logistics expert at close contact, which is never the case when you hire a 3PL. But the downside is that the expert’s salary is a lot of money to add onto an already expensive shipping process. Furthermore, despite a logistic expert’s “expertise”, he or she can rarely study all possible shipping arrangements before choosing a best arrangement-a task that TL logistics software performs with regularity.

As with hiring a logistics expert, contracting with a 3PL provider can be expensive, especially if you need a provider to manage your shipping process and propose innovative solutions. There are four types of 3PL providers: standard 3PL providers, which offer basic shipping services; service developers, which offer more specialized shipping services; customer adapters, which manage a company’s existing shipping process; and customer developers, which manage a company’s shipping process and propose innovative solutions. If you need a singular shipping solution, hiring a standard 3PL provider or service developer might make sense. But if you need TL shipping management and innovative TL solutions, TL logistics software is the more affordable option.

Due to its name, shippers sometimes believe that logistic software requires logistics expertise to operate, which isn’t true. Because the software serves as a logistics expert, figuring out the best routes and shipping methods, its users select recommended shipping options by accessing a user-friendly interface. Compared to 3PL, logistic software has three advantages: it puts companies in control of their shipping process; it allows them to cut the middleman out of the shipping process; and it provides them with the fullest range of shipping options, which combine to make the software the most affordable logistics solution on the market.

Logistics Software Aids in Retail Vendor Compliancy

Vendor compliancy occurs when a vendor meets a set of requirements imposed on it by a buyer of its products. Vendor compliance focuses on making it easier for the buyer to receive goods, process them upon reception, and bring them to store shelves, where applicable. Unfortunately for manufacturers, the most complex compliance standards are usually handed down by companies that have the largest buying power, a fact that causes some companies to question whether the money necessary to implement the standards would be worth the profits that resulted from doing business with an entity. In the long run, adapting business standards to meet compliance standards is almost always beneficial, as nothing can replace the selling power of having large contracts with major companies and retailers. However, affording the infrastructure necessary to facilitate compliance can still be a problem in the short run.

Retail Vendor Compliancy and Logistics Software

When you look at a major buyer’s retail vendor compliancy scorecard, a rating system that ranks vendors according to their compliance to a number of requirements, it’s often difficult to ascertain how to begin meeting the requirements. However, upon closer inspection, many companies find that a majority of compliance issues, and certainly the most critical ones, are associated with the shipping process, such as product labeling, product packaging, and method of shipment, to name a few. Yet, here there emerges another roadblock for many vendors: how to gain more control over the shipping process through logistics. Most companies receive their shipping logistics from one of three sources: an in-house logistic department, a third party logistics (3PL) provider, or by implementing logistic software, which allows you to become your own logistics provider without possessing logistical expertise.

In-House Logistics

Meeting shipping needs in-house is the traditional preference of companies that can afford to hire their own logistic experts, who typically earn around $80,000 per year. This fact alone prevents many companies from going in-house with their shipping process, as well as the fact that most companies pursue in-house logistic arrangements upon purchasing their own fleet, once and for all ending their dependence on 3PL.

3PL

What you receive from 3PL depends entirely on what type of 3PL provider you contract with: standard 3PL providers, who offer basic shipping services and seldom practice shipping logistics as a core practice; service developers, who offer more specialized services but not a comprehensive approach to the shipping process; customer adapters, who manage an existing shipping process but don’t propose new solutions; and customer developers, who manage the shipping process and do propose new solutions. For vendor requirements, customer developers make the most sense. But you can receive the same level of focus through logistic software at a fraction of the cost.

Logistics Software

Also referred to as freight transportation software, logistic software is priced as a software as a service (SAAS) offering, making it less expensive than other logistic options. What this means for vendors is less money spent on meeting vendor requirements, and an annual reduction in shipping expense that can be delegated toward other compliance needs. After using freight transportation software for one year, most companies experience a 10 percent reduction in shipping expense that increases in years following.

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