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.

Instead of Hiring a Logistic Expert, Save Money by Implementing Logistics Software

There are two inherent challenges to running a manufacturing business. The first is producing products that will sell. The second is shipping those products to retailers in a timely fashion at an affordable price. If your company has mastered the first challenge but is still searching for the ideal shipping solutions, you may be on the brink of hiring a logistic. When companies hire a logistic expert, they either hire an in house logistics professional or outsource their logistics to a third party logistics provider when their budget prohibits the former. If this describes your company, it’s important to know that, while hiring a 3PL provider may be less expensive than hiring an in house professional, there is a logistics option that costs significantly less than 3PL, and it exists in truckload transportation management software-also known as logistics software.

When companies hear about logistics software, they often think that it requires logistics expertise. But it doesn’t. Logistics experts tailor logistics software to meet a company’s unique shipping needs and allow the company to meet and control those needs through a friendly user interface. There are several reasons why implementing logistics software is more affordable than hiring a 3PL provider, beginning with the fact that logistics software is priced as a software offering and not a consultancy offering. Although the companies that design logistics-software are software companies, they employ freight logistics experts and are run by business veterans of the freight transportation industry. Another reason why logistics software is less expensive than 3PL is that 3PL arrangements typically result in shippers being charged over and above the actual cost of shipping solutions. When non-asset based 3PL providers secure shipping solutions for their clients, they contract with carriers that offer a discounted rate, allowing the 3PL provider to profit from the differential between actual service cost and service cost as charged.

In addition to being more cost effective than 3PL, logistics software also allows companies greater control over their shipping process by providing more shipping options. Most 3PL providers adhere to rigid shipping heuristics to provide clients with shipping options in the shortest amount of time. Consequently, many 3PL clients end up with shipping options that meet their needs but don’t offer the best possible delivery time at the lowest possible price. One example of how logistics software allows shippers to realize more shipping options can be seen in integrated shipping solutions. Whereas asset-based 3PL providers only offer as many shipping modes as they have equipment to support them, logistics-software allows shippers to integrate truck, boat and air shipping over the course of one transportation route. Whether your company’s shipping needs are just emerging or have recently changed, don’t pay more for freight shipping than you need to. By implementing logistics software, you can become your own logistics provider and cut the middleman out of the logistics function.

Warehousing Software: Use This Logistics Software To Upgrade The Way You Run Your Warehouse

Currently you might not be aware of why you need warehousing software. Right now your business might not be using various warehousing management systems and if this is the case you are really hurting your business. Maybe you have not been in business for that long and you have your own way of doing things.

You cannot rely on the old way of doing things just because you have a system in place that has worked out for you up until now.

The reality is you are going to need a sound warehousing management system in order to truly get the most out of your warehousing operations. Now you might be a bit worried about using warehousing software to implement such a system.

You do not need to be. A basic run down of what a warehouse management system is would be that it is advanced technology and different processes that optimize all warehousing functions.

You could not hope to be successful if you were not able to do this, and this is exactly what the software would enable you to do.

What are the functions warehousing software can help you better operate? Some of the functions you have in your warehouse that could be better managed would include dealing with receipts that come from different suppliers.

Other functions would include the process of making sure products are shipped to customers in a timely fashion the way they are supposed to be.

Warehouse operations also include any and all inventory movement and information that is going to flow in between. You do not have to be a large business owner in order to use this software, but it does tend to be used in bigger far more complicated distribution functions. It can still be an asset to the small business owner.

What warehousing software is designed to ultimately do for a business because when you decide to use this logistics software you are aiming to merge together different computer hardware, different software, and other peripheral equipment.

You want to combine these things with operating practices you are going to improve upon such as managing inventory, space, labor, and capital equipment inside of warehouses as well as distribution centers.

What implementation of this inventory software is going to do for your financially and otherwise because in the world of business you have to make sure you have every advantage you are able to get right?

If you are doing things in a way that put you at a disadvantage then it is going to be a matter of time before you are struggling to survive. Right now you might have a competitive advantage, but the competition is always working overtime to beat you out, so you must stay on top of things.

Implementation of warehousing software is going to allow you to increase the competitive edge you might already have or allow you to create one. One of the ways this happens is by reducing costs thus-fore increasing profits. Right now you have costs associated with labor, customer serve, inventory management, etc. All of these costs are going to be reduced.

Manage inventories in a warehouse in real time because with warehousing software you are not going to be using outdated methods that do not deal with what is going on in your warehouse now.

Using this inventory management software for your business will enable you to see what is going on and manage things in real time. The information you would be looking at is going to be as up to date as possible. You can get information as recent as the last order, shipment, receipt, or any type of movement in between.

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