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Logistics management software Vs Third Party Logistics: Which One Is Better?

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Logistics management software Vs Third Party Logistics: Which One Is Better?

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Product transportation is a necessary part of any manufacturing business whether it is functioning in the local, national or international market. Looking at vital part of transportation, companies spend huge sums on it, often overlooking the opportunity to save shipping costs.

 

Mainly focused on quality and price of the product, most companies fail to determine optimal shipping procedures. Which is why companies outsource the very task of shipping to professionals or buy a software for the same.

Now, what is the best way to get the shipping done at minimal pricing is the question that hovers over the minds of many.

 

Logistic management software is a transportation software which offers integrated shipping solutions that are custom-made according to company’s specific needs.

 

A single, integrated shipping solution can be devised for large companies with complicated shipping process and multiple assembly locations and warehouse needs, which will save significant time and money. For smaller companies that have simple shipping procedures, the software can be used to improve delivery time by studying factors such as road construction and highway traffic patterns.

 

Studies show that 10% of shipping costs can be saved by either hiring a 3rd party logistics provider or implementing logistics software. Though hiring a 3rd party logistics provider is a lot more expensive than implementing a logistics software.

We have listed crucial 4 reasons about why one should opt for Logistics Management Software instead of hiring 3rd party logistics.

 

Economical

 

Hiring a service provider providing end to end solution will cost almost equal to hiring an in-house logistics department. Instead one should opt for Logistics Management Software which provides logistics through a software as a service (SaaS) platform. Instead of relying on a costly comprehensive service provider one can save money and realize more control by using a software solution.

 

More Control

 

Usually, 3PL customers feel distanced from the shipping process and the managing entity. It is appealing for some shippers having the shipping process fully managed by another entity.

Due to the underlying expense and vendor issues involved, most shippers wish to be involved in the process. Freight logistics software give them full control of the shipping process rather than just being involved in shipping process.

 

Better Options

 

Traditionally, 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. Logistics software facilitates a better carrier option and makes several carrier options available. 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

 

None of the shipping processes is more secure than managing the shipper on its own. Instead of letting 3PL providers who may pick carrier according to their preferences and total disregard to customer’s requirements. When outsourcing to a 3PL, shippers naturally lose the capacity to scrutinize the carriers with which their loads are placed. Freight logistics software mitigates security concerns by putting you in control of the shipping process.

 

In nutshell, 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 strengthening a stale shipping process with better carrier options can have a notable impact on a company’s bottom line – an impact that logistics software allows you to achieve.