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.

Stock Management Software Overview

Stock management software has proven invaluable for organizations striving for greater control over their business and profitability. This software can help by taking care of many of the operational challenges that keep business owners from focusing on their original business, including warehousing and logistical challenges and controlling inventory.

Businesses can establish stronger methods of accounting for all the inventory movement within and between their facilities by using the inventory management applications. The supply chain runs more efficiently, orders are processed quicker, and customer management is well-organized.

The software which is available comes in many different versions they are good for large budgets,small budgets and businesses. It can simply create faithful logistic and inventory solutions for an organization of any size. Business leaders shall increase their management capabilities, have good control to their stock, and make improvement to efficiency of warehouse operations.

Businesses may enhance the accuracy of inventory records and also reduce data input errors by using software. For high flexibility, automatic assessment of stock levels, and replacement order initiative, stock management software can be used.

Stock management software can also be used to keep records of stock variance, movement, and performance reporting as well. These tools are important in helping the organizations to increase their productivity while reducing the operational and administrative costs considerably.

Businesses have had success using such software to lower the cost of hand counting inventory along with the data entry mistakes and running out of stock problems that come with it.

This software is able to forecast inventory demand and take initiative to restock orders before the stocks get depleted. This will help prevent running out of stock and the loss of sales because of it. By managing inventory, stock management software has also helped businesses maintain strong relationships with their customers, by continuously having product available. This allows for excellent performance and delivery. Greater customer contentment and preservation are provided by these abilities.

How Transportation Management Software Promotes Intelligent Execution

There is a subset of supply chain management called “transportation management system” that refers specifically to transportation operations and is a component within an enterprise resource planning system. This area has evolved quite a bit in recent years thanks to technological advancements, and now transportation management software has made it possible for companies to add context to a shipper’s transportation data. This software oversees four key processes of transportation management: planning and decision making, transportation execution, transportation follow-up, and measurement. Modern transportation management software has the ability to use context to determine whether:

  • an incorrect invoice charge was caused by a carrier re-weighing their freight or by re-classifying their freight
  • a shipment arrived late due to inclement weather or due to the consignee not being available to sign for the delivery

These are just two examples of the types of judgments that logistics shipping companies can make with the help of transportation management software. Here are a few more ways that this technology can be used today:

Exception Management Process

This software can be configured to periodically alert an individual when lanes, carriers, or facilities do not meet specified targets. This is especially helpful because it allows managers to instantly know when the amount of business their company is doing has changed. Before transportation management software, management would have had to wait up to a year before being made aware that targets were not being met. The sooner that management is aware of a problem, the sooner it can begin to look for a solution.

Freight Execution

Today, a single transportation management software product can be used for shipments in all modes, whereas before additional applications had to be added for special cases like small parcels. Additional documents, which are needed for shipments like pallet labels or hazardous materials documentation, can now be printed on-site. In the past, this documentation needed to be printed ahead of time.

Improved Communication

Logistics shipping companiescan provide vendors with a tool that allows them to pre-load shipping business’ rules, carriers, and purchase orders. Using this pre-loaded information, vendors can send shipments to the shipper’s carriers without having to wait for the carrier to provide this information.

Dashboards

All of the aforementioned data can be pulled into a centralized location, or dashboard, that shippers can use to monitor the company’s freight activity in real-time. The result is an effective measurement of the Freight Payment and Pre-Audit so that it matches the data that is continuously coming in. Put more simply, the ability to monitor this data in real-time means that shipper is finally able to determine what is happening in their supply chain. Only by staying up-to-date on trends and data will a shipper be able to make the most intelligent decisions.

When logistics shipping companies decide that they are ready to acquire transportation management software, they have three ways to do so. They can use a traditional purchased license (on-premise licensing,) a remote or cloud-based solution (hosted licensing,) or a blend of these two options (on-premise hosted licensing.) Shippers looking to determine which option is best for their organization should reach out to a transportation management software provider about their preferred opinion.