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.

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.

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.