TL Logistics Software – What Are Its Advantages?

If your company ships enough goods to qualify for full truckload (TL) shipping, you may think that your shipping situation can’t be improved. After all, TL shipping offers the advantage of shipping goods directly to their destination without the hassle and expense of warehouse stops. Yet, because the cost of shipping also includes the cost of the logistics function, companies should also question whether their logistics source is working for or against their shipping process in terms of cost.

Traditionally, companies either hire an in house logistic expert or outsource their logistics needs to a third party logistics (3PL) provider, either of which can be too expensive for smaller companies, especially when they need a comprehensive approach to the TL (truckload) shipping process. Today, however, companies have the option of implementing affordable TL logistics software instead of hiring an expert or outsourcing to a 3PL provider.

TL logistics software is geared toward companies that need TL shipping arrangements (i.e. where a carrier transports full semi trailers of goods on a regular basis). After implementing the software, a company selects its TL shipping arrangements from among ranked TL solutions that are presented on a user-friendly interface. When a company implements logistics software, it essentially becomes its own logistics provider, which brings three basic advantages: a wider range of shipping options; the possibility of integrated shipping solutions; and the removal of the middleman (3PL) from the logistics function. After implementing logistics software, studies show that companies lower their shipping cost by 10 percent within the first year alone.

To understand how logistics software achieves its impact, it helps to understand how companies overpay for logistics when they an in house expert or contract with a 3PL provider. When a company hires an experienced logistics expert, it can expect to pay between $75,000 and $90,000 in annual salary. Also, the shipping arrangements devised by the expert, although well researched, rarely result from the consideration of all possible shipping arrangements-a task that logistics software can perform in a matter of minutes.

Similar to hiring an expert, hiring a 3PL provider brings unnecessary cost from the beginning. And unless the provider is customer developer, which manages a company’s shipping process while developing new shipping solutions-the prospect of TL shipping being integrated with other shipping solutions (e.g. air and rail) is remote at best. Although 3PL has long been the logistics option for companies that don’t have logistics departments, that TL logistics software performs the work of a 3PL, except with better results, makes it the superior choice.

Logistics Software Solutions Can Benefit Your Company in Three Basic Ways

When companies present their transportation logistics solutions, they have tendency to either engage in corporate speak and not really say much about their solutions or speak with such expertise that they fail to give you a basic understanding of how logistics solutions can benefit your company in a daily way. For small to midsized companies, transportation logistics typically arrives in one of two forms: by a company outsourcing its logistics to a third party logistics (3PL) provider or by implementing logistics software solutions that are available as an online software application.

Given that logistics software offers an easy to use interface can be customized to a company’s particular shipping needs and costs far less than outsourcing to 3PL providers, it’s usually the logistics option of preference for small to midsized companies that don’t have the luxury of a shipping fleet or a large shipping budget. If you’ve heard of logistics software but are looking for a basic understanding of how it can aid your shipping process, we offer the following overview of how logistics-software solutions help companies in terms of freight optimization, shipping route optimization and shipping method integration.

Freight Optimization

For small to midsized companies that regularly ship less than a full freight load of products, freight optimization typically subsists on finding the best less than truckload (LTL) shipping options. LTL shipping is when a shipping carrier lets companies ship partial loads that combine to compose a full truckload. The cost value of LTL shipping comes from shippers splitting the cost of a full freight load. Although less than truck load shipping offers low shipping rates, due to numerous stops for delivery and pick up, it often takes goods longer to reach their destination than in other shipping arrangements. Nevertheless, logistics-software solutions can be used to find less than truckload carrier routes that offer the best delivery time. Because warehouse stops are a common feature of freight shipping, logistics software also offers warehouse optimization capabilities.

Shipping Route Optimization

If you use a 3PL provider, you probably won’t have any idea what shipping routes your carriers are using. But shipping routes are a major factor in determining overall shipping cost. Logistics-software can analyze shipping routes according to multiple criteria, including: length of route, traffic patterns, road quality and construction patterns. One example of how route optimization can decrease shipping cost and improve delivery time is by analyzing routes in terms of travel time. For example, a route that is shortest in distance may be longer than another route in terms of travel time due to traffic patterns.

Shipping Method Integration

Shipping method integration is an unofficial term that refers to the ability of logistics software to suggest integrated shipping methods for the sake of reducing shipping cost and improving delivery time. For example, even though air shipping is traditionally more expensive than ground shipping, logistics software might suggest shipping certain shipments by air due to expensive, unavoidable warehouse fees that would result from ground shipping. In addition, logistics software may make such suggestions as shipping products halfway to their destination by boat and the other half by freight truck.

Logistics Software Solutions – How Do They Compare to Third Party Logistics?

Third party logistics (3PL) is the most popular choice for freight logistics among small to midsized companies. In order to help companies that regularly make shipments that are too large to financially benefit from parcel shipping and too small to financially benefit from full truckload (FTL) shipping, companies turn to third party logistics providers to get them the best deals on less than truckload (LTL) shipping, integrated shipping methods and to reduce the delivery of products to retailers. To these ends, 3PL providers significantly reduce their clients’ shipping costs compared to what they would spend on shipping without the aid of freight logistics. But they obviously do so by charging their clients for freight logistics services.

So, what’s not to like about hiring a 3PL provider to reduce your company’s shipping costs and ensure that your goods are delivered in a timelier manner? After all, is there really such a thing as realizing freight transportation solutions without seeking the help of freight logistics experts? Yes and no. If freight logistics isn’t one of your company’s core competencies, you’ll certainly need to get logistics solutions from those that specialize in providing them. But you don’t have to turn to a 3PL provider and pay a middleman to provide you with shipping solutions when you can instead use online logistics software.

The difference between 3PL and logistics software solutions-also referred to as logistics management software-typically doesn’t lie in one having more logistics expertise than the other; rather, it has to do with how the logistics information is supplied, how much it costs and how much control companies have over their shipping process. Essentially, a third party logistics provider uses logistics management software to provide you with shipping solutions, whereas online logistics software lets you act as your own logistics provider for an affordable monthly fee. In no case will you find a 3PL provider that offers their services for the low price that you pay for logistics software solutions, nor will hiring a 3PL provider offer you as much control over your shipping options.

Having complete control over your shipping process has two main benefits: you can research the companies that you’re considering hiring and you never have to deal with a middleman’s business policies affecting the price or availability of certain shipping options. Aside of the financial and shipping management benefits offered by logistics management software, its greatest strength is its extreme ease of use. Although the term logistics software implies computer expertise, logistics software comes with an easy to use interface that neither requires expert computer knowledge or expertise in logistics, meaning that each of your company’s departments can be involved in its shipping process.