TL Logistics Software – Frequently Asked Questions

Logistics SoftwareIf you own a growing manufacturing company, chances are that your shipping needs will eventually change. But that doesn’t mean that the shipping process has to become more complex. In fact, producing more goods can actually make shipping simpler, as can be seen in truckload (TL) shipping, where a company ships a full semi trailer of products direct to destination. To arrive at the best TL shipping solutions, companies have three options: hire an in house logistics expert, outsource to a 3PL provider, or implement TL logistics software-also known as full truckload logistics software-which allows companies to become their own logistics provider. Below, we answer some commonly asked questions about a logistics solution that’s quickly becoming preferred to the more expensive, less flexible options or hiring in house experts or 3PL: truckload logistics-software.

What Aspects of the Shipping Process Does the Software Address?

Logistics software addresses the same aspects of the shipping process that a logistics expert or 3PL provider would address, including route analysis and optimization, and freight optimization. However, unlike a logistic expert, it doesn’t require a $70,000-$90,000 salary to do its work; and, unlike most 3PL providers, the range of shipping options it presents are as broad as possible.

Do You Need Logistics Expertise to Operate the Software?

One of the biggest misconceptions of logistics software in general is that it requires logistical expertise of its user. When you use logistics software, the software serves as the logistics expert, presenting numerous ranked shipping options and allowing you to choose by accessing a user-friendly interface. The goal of logistics software is to cut the middleman out of the logistic function, and it does this by doing the work for you.

How is the Software Implemented?

Most providers of logistics-software offer it on both a software as a service (SaaS) model and as an internal software solution. In either case, the software is tailored to seamlessly integrate with a company’s current shipping process, and can be easily modified when shipping needs change. In the case of internal software, the provider can usually install the software and the hardware necessary to support it.

How Much Does the Software Cost and How Much Does it Save?

The cost of logistics-software varies widely according to two factors: whether it is implemented internally (more expensive) or as a SaaS solution (less expensive), and the range of logistic options required. However, either solution is less expensive than hiring a logistic expert or contracting with a 3PL provider. Concerning cost savings, research shows that companies who implement the software can reduce their total annual shipping cost by 10 percent in the first year alone.

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Instead of Hiring a Logistic Expert, Save Money by Implementing Logistics Software

There are two inherent challenges to running a manufacturing business. The first is producing products that will sell. The second is shipping those products to retailers in a timely fashion at an affordable price. If your company has mastered the first challenge but is still searching for the ideal shipping solutions, you may be on the brink of hiring a logistic. When companies hire a logistic expert, they either hire an in house logistics professional or outsource their logistics to a third party logistics provider when their budget prohibits the former. If this describes your company, it’s important to know that, while hiring a 3PL provider may be less expensive than hiring an in house professional, there is a logistics option that costs significantly less than 3PL, and it exists in truckload transportation management software-also known as logistics software.

When companies hear about logistics software, they often think that it requires logistics expertise. But it doesn’t. Logistics experts tailor logistics software to meet a company’s unique shipping needs and allow the company to meet and control those needs through a friendly user interface. There are several reasons why implementing logistics software is more affordable than hiring a 3PL provider, beginning with the fact that logistics software is priced as a software offering and not a consultancy offering. Although the companies that design logistics-software are software companies, they employ freight logistics experts and are run by business veterans of the freight transportation industry. Another reason why logistics software is less expensive than 3PL is that 3PL arrangements typically result in shippers being charged over and above the actual cost of shipping solutions. When non-asset based 3PL providers secure shipping solutions for their clients, they contract with carriers that offer a discounted rate, allowing the 3PL provider to profit from the differential between actual service cost and service cost as charged.

In addition to being more cost effective than 3PL, logistics software also allows companies greater control over their shipping process by providing more shipping options. Most 3PL providers adhere to rigid shipping heuristics to provide clients with shipping options in the shortest amount of time. Consequently, many 3PL clients end up with shipping options that meet their needs but don’t offer the best possible delivery time at the lowest possible price. One example of how logistics software allows shippers to realize more shipping options can be seen in integrated shipping solutions. Whereas asset-based 3PL providers only offer as many shipping modes as they have equipment to support them, logistics-software allows shippers to integrate truck, boat and air shipping over the course of one transportation route. Whether your company’s shipping needs are just emerging or have recently changed, don’t pay more for freight shipping than you need to. By implementing logistics software, you can become your own logistics provider and cut the middleman out of the logistics function.

TL Logistics Software Streamlines the Truckload Shipping Process

Truckload (TL) shipping generally refers to the transportation of an amount of cargo that is enough to fill an entire semi-trailer. Unlike less than truckload (LTL) shipping, where carriers take partial loads from two or more shippers, combining them into a full load and dividing the load price, companies that perform TL shipping contract an entire load to a single shipper. While LTL shipping can present attractive pricing options for small to midsized companies that regularly ship less than a full truckload of products, the basic advantage TL shipping over LTL shipping is that the freight is never touched en route to its destination. LTL shipments are commonly handled multiple times en route. While truck load shipping is a more simplistic shipping process than less than truckload shipping, companies that use LTL shipping can still benefit from using TL logistics software to arrive at the best shipping solutions.

TL logistics-software is a particular form of truckload logistics software that helps companies optimize their freight and shipping routes to realize the most cost effective TL shipping solutions. In lieu of logistics-software, companies that don’t have their own shipping fleet or employ logistics professionals usually hire third party logistics (3PL) providers. However, for companies that need to save as much as possible on the shipping process, logistics-software is a more cost effective logistics solution than outsourcing to a 3PL provider for two reasons: it allows companies greater leverage in the shipping process and it removes the need to pay a middleman to dialogue with carriers. When companies implement logistics software, they essentially go from outsourcing their logistics to being their own logistics provider, using an easy to use user interface that’s customized to their company’s particular shipping needs.

Logistics software can be customized in accordance with a variety of shipping concerns, but freight optimization and route optimization two aspects of truckload shipping that logistics software applies to in all cases. Freight optimization deals with a variety of freight concerns, including freight size and volume, packaging and composition, all of which affect the cost of shipping. To put it simply, truckload logistics-software is used to find a carrier that offers the best price in relation to the combined factors of freight optimization. Similarly, logistics-software gives companies the ability find the best shipping routes based on various criteria, including: shortest distance, construction patterns, traffic patterns and road surface quality. By performing freight optimization and route optimization, logistics-software presents companies significantly reduce their shipping costs while improving their delivery time. According to recent studies, companies that implement logistics-software can reduce their shipping costs by 10 percent at the end of one year.

How Does TL Logistics Software Compare to Other Logistics Options?

When a company needs to ship its goods form point A to point B, finding the best shipping arrangement is rarely as simple as contacting the nearest carrier and signing a contract. On the contrary, most shippers require the aid of in-house logistics experts, third-party logistics (3PL) providers, or logistics software to arrive at the right shipping plan in terms of delivery time and cost. However, there’s a big difference between hiring an in-house logistics expert, hiring a 3PL provider, or implementing logistic software. So, which one offers the most benefits to the most shippers? To answer this question, it helps to explain how each of these options operates within the shipping process.

A logistics expert’s place within the shipping process is fairly obvious: for roughly $80,000 a year, he or she manages a company’s shipping process and proposes newer, better shipping solutions when possible. The upside side of hiring an in house expert is that you have a logistics expert at close contact, which is never the case when you hire a 3PL. But the downside is that the expert’s salary is a lot of money to add onto an already expensive shipping process. Furthermore, despite a logistic expert’s “expertise”, he or she can rarely study all possible shipping arrangements before choosing a best arrangement-a task that TL logistics software performs with regularity.

As with hiring a logistics expert, contracting with a 3PL provider can be expensive, especially if you need a provider to manage your shipping process and propose innovative solutions. There are four types of 3PL providers: standard 3PL providers, which offer basic shipping services; service developers, which offer more specialized shipping services; customer adapters, which manage a company’s existing shipping process; and customer developers, which manage a company’s shipping process and propose innovative solutions. If you need a singular shipping solution, hiring a standard 3PL provider or service developer might make sense. But if you need TL shipping management and innovative TL solutions, TL logistics software is the more affordable option.

Due to its name, shippers sometimes believe that logistic software requires logistics expertise to operate, which isn’t true. Because the software serves as a logistics expert, figuring out the best routes and shipping methods, its users select recommended shipping options by accessing a user-friendly interface. Compared to 3PL, logistic software has three advantages: it puts companies in control of their shipping process; it allows them to cut the middleman out of the shipping process; and it provides them with the fullest range of shipping options, which combine to make the software the most affordable logistics solution on the market.

The Benefits of Implementing Freight Logistics Software

More Control

Freight logistics software-also known as truckload logistics software-lets companies supreme control over the economy and timeliness of their shipping process by allowing them choose their own shipping options. When companies outsource to a third party logistics (3PL) provider, the provider develops shipping solutions that are in its best business interest, meaning that shipping companies can miss out on shipping options that would benefit them the most. Because logistics software is tailored to apply to a company’s unique shipping process and offers an easy to use interface, it does not require logistics expertise of its users. In addition, because logistics-software is offered on a SaaS model, it can easily be re-adapted to a company’s shipping needs as they change over time.

Lower Cost

Logistics-software costs less than 3PL for a simple reason: it is priced as a software solution and not as a logistics consultancy service. The cost of logistics software is based on a company’s shipping requirements, allowing companies to pay for only as many services as they need. For example, if a small company’s shipping needs consist only of less than truckload (LTL) shipping arrangements, the options offered through logistics-software will reflect these needs only. In addition to saving companies money on the logistics function, logistics software also allows companies to save on shipping solutions. Whereas some 3PL providers (e.g. non-asset based providers) charge shipping companies over and above the cost of a shipping solution in order to profit from a carrier discount, logistics-software insures that companies never pay hidden fees.

Integrated Shipping Solutions

When shipping companies outsource their logistics to asset-based logistics providers, they only realize shipping solutions that can be accommodated by the asset-based provider’s transportation assets (e.g. trucks, boats planes, etc.). But with logistics software, companies can realize shipping solutions that involve various modes of transportation to a certain location. For example, logistics-software may reveal that shipments to a certain location would be cheaper to transport by air for the majority of the trip due to warehouse fees that would result from ground shipping. Considering the cost of the shipping process, realizing integrated shipping solutions on a daily basis can dramatically impact a company’s bottom line.

Significantly Improved Bottom Line

Logistics-software can improve a company’s bottom line by presenting the most economical shipping options for a company’s shipping needs. But it can also save companies money by removing the need to hire in house logistics professionals when they grow large enough to purchase their own shipping fleet. Although logistics-software is often presented as an ideal solution for small to midsized companies that can’t hire their own logistics experts; it is also used by companies whose annual shipping costs exceed six figures, allowing them operate without the cost of logistics professionals. Research shows that companies can reduce their overall shipping costs by 10 percent after only one year of using logistics software.