Is Transportation Management Software Beneficial?

When trucking and other shipping companies need to oversee the planning and operation of their vehicles, they use a transportation management system. This subset of supply chain management focuses specifically on transportation operations by helping companies choose the best carrier. In recent years, transportation management software has become the key component within this process because it adds context to the shipper’s transportation data so that the software is aware of various components and better equipped to make good decisions. Organizations that work with logistics shipping companies are able to find software that best meets their needs, which therefore allows these organizations to reduce truckload and less-than-truckload costs.

Before making the mistake of undervaluing transportation management software, an organization should recognize that these resources help improve organizational awareness across the supply chain. Organizations’ supply chain awareness is improved by the technological advancements that have been made with regards to transportation management software provided by logistics shipping companies. Some of those technological advancements are outlined in this article.

Freight Execution

Regardless of modes, shippers are now able to tend to all shipments by using a single system. This not only means that individual apps are not needed to handle specific modes like small parcel, but also means that one system can be used to integrate data with the host system. Transportation management software also makes it possible for information for each mode to be included in the host system in the same format, so that it is easier to work with. One other important aspect that impacts freight execution is the ability to print documentation. Shippers with shipments like less-than-truckload shipments and small parcel labels can print necessary documentation like pallet labels, international documentation, and hazardous materials documentation on-site.

Pre-Audit Measures

When the organization needs to audit its shipping processes, this task is much simpler when an individual can match the information from the freight execution tool to the carrier’s invoice. One simply needs to match up the characteristics of the invoice with the corresponding charges for each shipment to more efficiently complete an audit.

Communication and Visibility Tools

When an execution tool with transportation management software is provided to the shipper’s vendors, the shipper can pre-load it with organizational rules, carriers, and purchase orders. The shipper’s carriers can then use this pre-loaded information to tender shipments, without needing to depend on the carrier to provide the shipper with these crucial details.

Real-Time Monitoring

The above tools can be included in a dashboard that allows the organization to monitor and manage freight activity in real-time. Using their own business rules, the organization is able to ensure proper measurement and management of freight payment and pre-audit details to gain a better understanding of each shipment’s characteristics. This monitoring and analysis is made possible by the information supplied by the transportation management software.

An organization can use supplied metrics to draw its own conclusions about the meaning of events within the supply chain, or can rely on logistics shipping companies to analyze this task for them. Regardless of which route they choose, organizations should recognize that the technological advancements provided by transportation management software helps the organization monitor shipping activity in real-time.

Logistics Planning Software – Is it Right For Your Company?

If your company has shipping needs and it doesn’t have its own shipping fleet, then you know how frustrating it can be to find shipping solutions that offer you everything that you need at the same time: timely delivery, low cost and dependability. For small to midsize companies that don’t have a large shipping budget, trying to find these three qualities on an ongoing basis can take more time than they seem worth, especially when companies don’t have logistics experts on their payroll. After a few months or less, companies in this position become tired of overpaying for shipping options that they don’t need and usually decide to invest in a transportation logistics solution.

Traditionally, realizing a logistics solution meant hiring a third party logistics (3PL) provider. But the trend of outsourcing logistics is gradually being reversed as companies begin to see the value of using logistics planning software to manage their shipping operations. Transportation logistics software offers several advantages over 3PL, including lower price, enhanced logistics expertise, more control over the shipping process and less shipping process disruption. But in order to find out if logistics planning software is right for your company, it helps to answer the following two questions:

Could you Benefit from Less than Truckload (LTL) Shipping?

LTL shipping is where two or more partial freight loads are combined into a full freight load, with the shipping cost being split between the shippers. If you don’t want to waste money shipping your partial loads as full loads and your shipments are large to make parcel shipping realistic, chances are that you could benefit from LTL shipping. The downside of LTL shipping is that, due to the increased number of stops to pick up and deliver shipments, shipments may take longer to arrive at their destination. But transportation logistics software can be used to determine an LTL arrangement that would deliver your shipment faster than other LTL arrangements.

Do you Want More Control Over Your Shipping Process?

This question might seem like a no-brainer, but there are companies that wish to wash their hands of the logistics situation and have a third party do the work. However, there are two things that these companies seldom realize: due to its customizable features and easy to use interface, logistics planning software doesn’t amount to “work”; and not using logistics software narrows shipping options. For example, if an LTL carrier finds it unfeasible to offer the level of “discount” that a 3PL provider desires (receiving a freight discount and then charging their customers a higher price is how 3PL companies make their money), then that carrier typically becomes off limits through a 3PL company, regardless of what benefits it might offer your shipping process. Taking control of your shipping process through logistics software amounts to more than a semantic notion of “control”; it means having more control over your company’s finances and more control over the companies that you ship with.

Logistics Software Aids in Retail Vendor Compliancy

Vendor compliancy occurs when a vendor meets a set of requirements imposed on it by a buyer of its products. Vendor compliance focuses on making it easier for the buyer to receive goods, process them upon reception, and bring them to store shelves, where applicable. Unfortunately for manufacturers, the most complex compliance standards are usually handed down by companies that have the largest buying power, a fact that causes some companies to question whether the money necessary to implement the standards would be worth the profits that resulted from doing business with an entity. In the long run, adapting business standards to meet compliance standards is almost always beneficial, as nothing can replace the selling power of having large contracts with major companies and retailers. However, affording the infrastructure necessary to facilitate compliance can still be a problem in the short run.

Retail Vendor Compliancy and Logistics Software

When you look at a major buyer’s retail vendor compliancy scorecard, a rating system that ranks vendors according to their compliance to a number of requirements, it’s often difficult to ascertain how to begin meeting the requirements. However, upon closer inspection, many companies find that a majority of compliance issues, and certainly the most critical ones, are associated with the shipping process, such as product labeling, product packaging, and method of shipment, to name a few. Yet, here there emerges another roadblock for many vendors: how to gain more control over the shipping process through logistics. Most companies receive their shipping logistics from one of three sources: an in-house logistic department, a third party logistics (3PL) provider, or by implementing logistic software, which allows you to become your own logistics provider without possessing logistical expertise.

In-House Logistics

Meeting shipping needs in-house is the traditional preference of companies that can afford to hire their own logistic experts, who typically earn around $80,000 per year. This fact alone prevents many companies from going in-house with their shipping process, as well as the fact that most companies pursue in-house logistic arrangements upon purchasing their own fleet, once and for all ending their dependence on 3PL.

3PL

What you receive from 3PL depends entirely on what type of 3PL provider you contract with: standard 3PL providers, who offer basic shipping services and seldom practice shipping logistics as a core practice; service developers, who offer more specialized services but not a comprehensive approach to the shipping process; customer adapters, who manage an existing shipping process but don’t propose new solutions; and customer developers, who manage the shipping process and do propose new solutions. For vendor requirements, customer developers make the most sense. But you can receive the same level of focus through logistic software at a fraction of the cost.

Logistics Software

Also referred to as freight transportation software, logistic software is priced as a software as a service (SAAS) offering, making it less expensive than other logistic options. What this means for vendors is less money spent on meeting vendor requirements, and an annual reduction in shipping expense that can be delegated toward other compliance needs. After using freight transportation software for one year, most companies experience a 10 percent reduction in shipping expense that increases in years following.