The Benefits of Implementing Freight Logistics Software

More Control

Freight logistics software-also known as truckload logistics software-lets companies supreme control over the economy and timeliness of their shipping process by allowing them choose their own shipping options. When companies outsource to a third party logistics (3PL) provider, the provider develops shipping solutions that are in its best business interest, meaning that shipping companies can miss out on shipping options that would benefit them the most. Because logistics software is tailored to apply to a company’s unique shipping process and offers an easy to use interface, it does not require logistics expertise of its users. In addition, because logistics-software is offered on a SaaS model, it can easily be re-adapted to a company’s shipping needs as they change over time.

Lower Cost

Logistics-software costs less than 3PL for a simple reason: it is priced as a software solution and not as a logistics consultancy service. The cost of logistics software is based on a company’s shipping requirements, allowing companies to pay for only as many services as they need. For example, if a small company’s shipping needs consist only of less than truckload (LTL) shipping arrangements, the options offered through logistics-software will reflect these needs only. In addition to saving companies money on the logistics function, logistics software also allows companies to save on shipping solutions. Whereas some 3PL providers (e.g. non-asset based providers) charge shipping companies over and above the cost of a shipping solution in order to profit from a carrier discount, logistics-software insures that companies never pay hidden fees.

Integrated Shipping Solutions

When shipping companies outsource their logistics to asset-based logistics providers, they only realize shipping solutions that can be accommodated by the asset-based provider’s transportation assets (e.g. trucks, boats planes, etc.). But with logistics software, companies can realize shipping solutions that involve various modes of transportation to a certain location. For example, logistics-software may reveal that shipments to a certain location would be cheaper to transport by air for the majority of the trip due to warehouse fees that would result from ground shipping. Considering the cost of the shipping process, realizing integrated shipping solutions on a daily basis can dramatically impact a company’s bottom line.

Significantly Improved Bottom Line

Logistics-software can improve a company’s bottom line by presenting the most economical shipping options for a company’s shipping needs. But it can also save companies money by removing the need to hire in house logistics professionals when they grow large enough to purchase their own shipping fleet. Although logistics-software is often presented as an ideal solution for small to midsized companies that can’t hire their own logistics experts; it is also used by companies whose annual shipping costs exceed six figures, allowing them operate without the cost of logistics professionals. Research shows that companies can reduce their overall shipping costs by 10 percent after only one year of using logistics software.

What is Logistics Software?

The Merriam-Webster Dictionary defines logistics as, “the handling of the details of an operation.” At the heart of the profitability and overall success of a business is an efficient logistics system. Managing production, parts, inventory, and shipments all fall under the responsibilities of the logistics, or supply chain, management department. Such a large job includes the daunting task of managing the many details associated with logistics. Employing the use of a good logistics company can greatly affect the outcome of the logistical branch of a business. However, hiring a company that specializes in logistics can prove to be very costly to carry out. Therefore, utilizing a logistics software program may be more economical for small to moderate facilities.

When a logistics company is used, it will handle the day to day management of the business. It will have its own trained personnel that can micro-manage every detail of the supply chain. For a large company with big operations, this is a necessity. Trusting such a vital factor to an untrained person could be detrimental to the business. Many manufacturing enterprises will also maintain a logistics manager as well. Large companies will recognize cost-saving benefits that will offset the expense of continued use of a logistics company.

Unlike a large manufacturer, even a small company can benefit from logistics software. Many software makes have designed an extremely easy to use, user-friendly interface. They are fully automated and can come as a suite with many optional applications or individually loaded for specific applications only. Add to the customizable features, that they often offer online and telephone tech support; this software pays for itself in very little time.

One thing that logistic software does is use a database to make and store various records necessary for keeping track of the many processes associated with a supply chain. The software can manage the distribution, warehousing, inventory, transportation details and expenses, and customer-friendly customer service options.

Some software makers also offer global visibility, bar-code scanning, billing administration and automated issue reporting to increase the value of the services that a business gives to their clients.

A business can track how many parts they have on hand and ordered, how much completed merchandise is available, current trucking routes and loads available, and log customer service interactions. Being able to input this information seamlessly and with as little effort as possible, every business that uses logistics software or a logistics company can save money. High inventory levels cost company’s money with the operating cost associated with warehouses. Being able to communicate with a client when a load will be available will increase customer satisfaction levels. And finally being able to log customer problems, a company can identify a trend before it becomes too overwhelming.

There are several services available to manage a company’s logistics department. Without selecting a method to manage a company’s logistical issues, it will loose money and potentially suffer from low customer and employee satisfaction. Using a software or company is very seldom optional. Therefore, the important thing is to find one that best suits the needs of one’s company, at a cost they can afford, and utilizing all its features to develop a business that is well run and sure to be successful.

Freight Logistics Software Vs Third Party Logistics: Which Is Better?

Today, two types of freight solutions appeal to shippers that rely on carriers: logistics software (a.k.a. TMS software) and third party logistics (3PL). Logistics software allows shippers to become their own logistics provider by using a software program, while 3PL providers negotiate arrangements between shippers and carriers. Frequently compared and contrasted, logistics software and 3PL each offer unique benefits. However, the former has the following important advantages:

Less Expensive

Standard 3PL providers and service developers, which offer particular services and not comprehensive solutions, are usually quite affordable. When you hire a provider that offers innovative management of the shipping process – namely, a customer developer – the cost can compare to hiring an in-house logistics department. Logistics software provides logistics through a software as a service (SaaS) platform. It can also be implemented as an in house solution. Instead of relying on a costly customer developer, you can save money and realize more control by using a software solution.

More Control

A top complaint of 3PL customers is they feel distanced from their shipping process and the entity that manages it. Different 3PL providers have different approaches, but few of them integrate the shipper in the shipping process in a formal capacity. For some shippers, having the shipping process fully managed by another entity is appealing. Due to its expense and vendor issues it involves, most shippers wish to be involved in the process. Freight logistics software does more than “involve” shippers in their own shipping process; it puts them in control of it.

Better Options

3PL providers make freight arrangements by listing an available load in an electronic posting system, where it can be matched with an available carrier, or by negotiating with carriers that don’t use a posting system. Because the former method is usually the easiest, many 3PL providers use it to arrange the largest percentage of shipments – a scenario that limits shippers to carriers who use a posting system. Logistics software removes this barrier and exposes you to more carrier options. In some instances, a shipper misses the best carrier option because the carrier who could provide it will not work with the shipper’s 3PL.

Greater Security

No shipping process is as secure as one that the shipper handles on its own. When outsourcing to a 3PL, shippers naturally lose the capacity to scrutinize the carriers with which their loads are placed. Although 3PL providers select carriers with the customer in mind, they also select them with themselves in mind – a dichotomy that can jeopardize the interests of shippers. Freight logistics software alleviates security concerns by putting you in control of the shipping process.

Conclusion

Logistics software is a viable replacement for 3PL, particularly for shippers who wish to control their own shipping process. Next to payroll, shipping is the second largest operating expense for most shippers. This means that rejuvenating a stale shipping process with better carrier options can have a significant impact on a company’s bottom line – an impact that logistics software allows you to achieve.