Logistics Software Removes the Need For 3rd Party Logistics Providers

The more products a company ships, the more shipping costs become subject to cost saving strategies. For most companies, realizing the most economical shipping solutions depends on the implementation of the most popular form of supply chain software (SCS): logistics planning software. On the most basic level, the solutions offered by logistics software improve a company’s phased planning measures, product sales forecasts and scientific safety stock. Some companies hire 3rd party logistics providers, but more and more companies are turning to logistics software in place of 3rd party logistics providers for two reasons: logistics software offers the same level of quality as 3rd party logistics providers and it offers it a much lower price.

When companies use logistics planning software, they can centralize and integrate their product delivery system by allowing drivers at different sites to connect using the most efficient travel routes, which increases product delivery time and decreases fuel costs by reducing empty running. Regardless of which style of logistical planning a company needs to implement-inbound logistics, contract logistics, LCL/FCL, LTL/FTL, etc.-logistics planning software allows companies to arrive at advanced planning and scheduling solutions that can significantly increase their bottom line. By implementing this software, companies can improve the cost effectiveness of the following product distribution arrangements, among others: container planning and empty container repositioning, intermodal transport, multi-hub and multi-leg transport, cross docking, multi-compartment trailer planning and inventory management.

One example of how logistics software helps companies reduce their shipping costs can be seen in less than truckload (LTL) shipping arrangements. Especially beneficial for companies that don’t ship a high volume of goods, LTL shipping allows companies to pay a fraction of full truckload (FTL) shipping costs. LTL shipping combines multiple partial truckloads into a full truckload and splits the full load price between the shippers. For trucking companies, LTL is beneficial because it draws in customers who would traditionally ship their good by parcel carrier. Another example of how logistics software can save companies money is by examining the characteristics of shipping routes. For example, while the shortest route might seem to be the fastest route, this software can reveal that a longer route would be faster due the traffic characteristics of the shorter route.

Without this software, most companies continue to pay more for logistical solutions than they need to. While research shows that both logistics software and 3rd Party logistics providers can help companies reduce their annual shipping costs by 10 percent at the end of one year, opting for this software adds to the savings. When companies use logistics software, they increase their bottom line in basic two ways: by delivering their products to the sales floor faster and by reducing the cost of getting them there.

TL Logistics Software Streamlines the Truckload Shipping Process

Truckload (TL) shipping generally refers to the transportation of an amount of cargo that is enough to fill an entire semi-trailer. Unlike less than truckload (LTL) shipping, where carriers take partial loads from two or more shippers, combining them into a full load and dividing the load price, companies that perform TL shipping contract an entire load to a single shipper. While LTL shipping can present attractive pricing options for small to midsized companies that regularly ship less than a full truckload of products, the basic advantage TL shipping over LTL shipping is that the freight is never touched en route to its destination. LTL shipments are commonly handled multiple times en route. While truck load shipping is a more simplistic shipping process than less than truckload shipping, companies that use LTL shipping can still benefit from using TL logistics software to arrive at the best shipping solutions.

TL logistics-software is a particular form of truckload logistics software that helps companies optimize their freight and shipping routes to realize the most cost effective TL shipping solutions. In lieu of logistics-software, companies that don’t have their own shipping fleet or employ logistics professionals usually hire third party logistics (3PL) providers. However, for companies that need to save as much as possible on the shipping process, logistics-software is a more cost effective logistics solution than outsourcing to a 3PL provider for two reasons: it allows companies greater leverage in the shipping process and it removes the need to pay a middleman to dialogue with carriers. When companies implement logistics software, they essentially go from outsourcing their logistics to being their own logistics provider, using an easy to use user interface that’s customized to their company’s particular shipping needs.

Logistics software can be customized in accordance with a variety of shipping concerns, but freight optimization and route optimization two aspects of truckload shipping that logistics software applies to in all cases. Freight optimization deals with a variety of freight concerns, including freight size and volume, packaging and composition, all of which affect the cost of shipping. To put it simply, truckload logistics-software is used to find a carrier that offers the best price in relation to the combined factors of freight optimization. Similarly, logistics-software gives companies the ability find the best shipping routes based on various criteria, including: shortest distance, construction patterns, traffic patterns and road surface quality. By performing freight optimization and route optimization, logistics-software presents companies significantly reduce their shipping costs while improving their delivery time. According to recent studies, companies that implement logistics-software can reduce their shipping costs by 10 percent at the end of one year.

Logistics Software Vs 3rd Party Logistics Companies

Whether you are a small company that transports your products through a shipping provider or a large company that has your own shipping fleet, saving the most money and time on your shipping arrangements typically requires the implementation of transportation logistics. However, while the efficacy of transportation logistics is inarguable, there continues to be a debate about whether it is better for companies to hire 3rd party logistics companies or to purchase logistics management software and handle logistical issues on their own. While purchasing logistics software is far and away more cost effective than hiring out 3rd party logistics companies, some companies question whether logistics management software is as effective at revolutionizing the shipping process as a logistics company. Yet, once companies implement logistics software, they soon see that the only difference between the software and a logistics company is price. For those who are still on the fence about logistics software, below we list a few of the helpful services that it can provide at the same level of quality as a logistics company.

Freight Shipping Analysis

On the surface, freight shipping can seem like a cut and dried affair. However, when you analyze the various cost factors involved in freight shipping, it becomes anything but a simple process of shipping your products from one location to another. For example, fuel surcharges, warehouse fees and load style can play a large role in determining whether your shipping process is cost effective or cost prohibitive. Without the aid of logistics, companies are basically at the mercy of shipping companies to apprise them of what shipping options make the most sense, and you can count on the fact that shipping companies aren’t in the business of saving you money at the expense of cutting into their profits. By implementing logistics software, you can examine your shipping needs according to various criteria and engage shipping companies in a bidding process until you receive the best deal.

Shipping Route Analysis

Even companies who own their own shipping fleet or deliver goods locally can benefit from logistics software. In addition to removing unnecessary costs from the shipping process, logistics software can also reduce shipping costs and improve delivery time by identifying the shortest shipping routes according to various criteria. For example, while a route that is shorter in length than another route may seem to be the timeliest transportation route, logistics software can point out that a shorter route will take more time than a slightly longer route due to such factors as road construction, traffic patterns and traffic signals.

Integrated Shipping Analysis

In addition to pointing out the best freight shipping options and the best shipping routes, logistics software may also reveal that a company could save time and money on their shipping process by integrating different means of product transportation. For example, while air shipping is often a second consideration to ground shipping due to air shipping rates, logistics software can reveal that shipping by air alone or combining air shipping with ground shipping is the most cost effective means of transporting goods. While ground shipping might offer lower rates, such factors as warehouse stops and fees and the variety of fees that can rack up from your products moving from one ground shipping company to the next can sometimes make ground shipping cost prohibitive. By analyzing the time and cost benefits of integrated shipping arrangements, logistics software can create shipping solutions that you could never create on your own.