TL Logistics Management Software – Is It Better Than Third Party Logistics?

For companies that ship their goods by ground, using truckload (TL) shipping arrangements is key to reducing the cost of the shipping process while improving delivery time. TL shipping occurs when a shipper contracts with a carrier to ship full semi trailer loads of goods to a specific destination-a scenario that represents the opposite of less than truckload (LTL) shipping, where companies that ship less than full semi loads combine their loads to form a full load and share the price. Unlike TL shipments, which are valued for their timeliness, LTL shipments are prone to numerous pick up and delivery stops, and can result in unwanted warehouse fees.

Even if your company qualifies for truckload shipping arrangements, it still needs a way to arrive at the best arrangements for its situation-a need that can be met through one of three scenarios: hiring in house logistics experts, outsourcing to third party logistics (3PL) providers, or implementing TL logistics management software. Traditionally, companies have pursued hiring their own logistics experts; or, if developing a logistics department proved unaffordable, outsourced their logistics to a 3PL provider. But today, more companies are choosing to implement logistics software, of which TL logistics management software is one type, to arrive at the best shipping arrangements.

Compared to hiring in house experts or outsourcing to 3PL providers, TL logistics management software brings two advantages: it costs less, and it results in more shipping solutions. By allowing companies to become their own logistics providers, logistics software cuts the middleman out of the shipping process-a move that can save larger companies six figures annually. But the software also cuts down on the cost of shipping by performing shipping route analysis and optimization and analysis of integrated shipping solutions to a degree unavailable through 3PL providers.

An example of how TL logistics management software can benefit the truckload shipping process is as follows: upon performing route analysis in relation to integrated shipping options, the software might determine that shipping a load by truck half way to its destination and shipping it rest of the way by air would provide the lowest shipping cost and best delivery time. If a company used a 3PL provider, this scenario would only occur under two circumstances: if a non-asset based 3PL provider had a financial relationship with a trucking carrier and an air carrier whose routes could intertwine, or if an asset based 3PL provider owned the right assets to make such a situation financially favorable.

Truckload Logistics Management Supports Two Important Shipping Functions

Truckload shipping is the process of hauling a full semi-trailer of freight at a time. The freight consists of an entire shipment of one company’s products. Companies that do not ship enough product to fill an entire trailer commonly use less than truckload shipping. This method makes use of multiple carriers which combine freight loads and split the total shipping cost. Less than truckload or LTL shipping is a very good solution for smaller companies that simply cannot meet the freight load requirements for a semi-trailer. Full truckload shipping or TL has many benefits that make it the more desirable choice for many companies. These benefits include decreased delivery times, minimal warehouse charges, and reduced freight handling. Determining the best carrier and route for a shipment is not as simple as comparing rates between carriers. It involves much more and companies that use this type of shipping often have to use specific software or hire a third party to help manage this aspect of their business. Truckload logistics management is a very detailed process and understanding the two aspects that it consists of will make it easier to choose how to handle the task.

Truckload Logistics Management: Performing Freight Optimization

A very large determining factor for shipping cost is the type of freight being shipped. Companies that ship refrigerated products need a carrier that has the appropriate trailer. Products that are safety hazards must be shipped by someone licensed to handle them. Freight optimization takes these considerations and many others into account to provide the best shipping options. The size and shape of the products along with how it is packaged all play a part in how the freight is shipped. Truckload logistics management analysis all these factors to determine the most optimal way to ship the product. By using software, your company has an unlimited number of carrier options for each shipment. Third party logistics providers only look at options that provide their own financial benefits. Using specifically designed software is more cost efficient, reliable, and allows complete control over all company shipments. Employees have all the tools necessary to choose the most rewarding shipping options for your business.

Truckload Logistics Management: Finding the Most Ideal Route

Knowing the best route for your product is another tough job when choosing freight shipping carriers. TL shipping is direct and involves no multiple pickups for other businesses or freight combining. Even with this great benefit, route selection is still very important. Traffic, road surfaces, and construction can all affect the timeliness of the delivery. Choosing the best routes ensures faster delivery of your product. Third party providers do take these factors into account, but make the decision for you. Software designed for truckload logistics management takes this one step further and allows employees to examine the routes based on these criteria. The biggest problem with using a third party to perform route analysis and other shipping functions is overpayment for work that can just as easily be done by employees. By using software with a great user interface, your company has all power in shipping decisions and can make choices based on company interests and costs.

The Benefits of End to End Logistics Management Software

Organizations that have several campuses or facilities have an overhead cost associated with moving inventory and logistical needs. Product and inventory, components for products, even office machinery or documents, need to be moved from one location to another, and this takes time (tracking down the item in the first place, making sure nobody else is using it) and money (freight delivery fees from commercial carriers like FedEx, DHL or UPS).

This overhead will never entirely go away, though it regularly gets transformed by way of technology. One of the best business models of the last quarter century, from the founding of UPS to eBay, has been to trim inefficiencies from this category of overhead.

For your own organization, trimming the excess from this overhead is important in any economy, but may be the key to keeping the business open in the current down cycle. For large organizations – very large ones – the usual method of dealing with this is to get a third party involved to handle updating quotes for freight transportation; a freight broker services dozens to hundreds of clients and gets regular updates on prices.

What’s changed is that the technology is in place to make freight brokerage services as necessary as full service travel agents are. More and more of the freight carrying services are providing their prices in formats where they can be collated by internet search engines. This raw data allows for useful analytics on trends on pricing, delivery times and more.

Even so, many companies and organizations work out manual “Requests for quotes” and tabulate them internally to their own metrics, simply because it’s hard to tell if a broker is working for them, for another client, or trying to meet a quota with a shipping company to maintain a pricing tier. This is starting to change, and the software tools to let this change happen are becoming more wide spread.

In addition to automating the quote generation process, these software tools also improve transparency in logistical operations; they make for a substantial improvement in tracking package shipment and delivery, while helping costs stay under control.

Automated solutions give you better data, and data that’s assimilated more rapidly, for example, fully automated updates, rate changes between carriers, automated weekly fuel surcharge changes, etc. New automated tools are actually able to utilize proprietary technology to statistically normalize carrier rates and various pricing rate bases to determine optimal carriers and optimal pricing strategies for companies, utilizing each company’s unique shipping characteristics, shipping locations, inbound activity, etc.

There are many TMS software packages available in the marketplace, and many are effective in different areas, but do not have carrier relationships, know-how, or freight volume to determine and coordinate appropriate pricing strategies for shippers. Third-party logistics companies (3PL’s) have carrier relationships, but rarely have technology available to execute appropriate and effective strategies – and, at present, none have small parcel carrier compliancy available with their websites or technology, i.e. FedEx, UPS, USPS, etc.

Shippers who are able to obtain companies that offer the best fit for their particular shipping needs with an end to end logistics management software solution can realize the benefits immediately, and can usually realize a payback scenario within their corporate guidelines.