Truckload Logistics Software – A Better Solution During Tough Economical Times

Companies that use large semi-trailers to haul their products need a little extra support to get the most out of their shipments. Truckload logistics software works best for companies that produce enough freight to use full truckload shipping. There are alternative software choices that are just as helpful for smaller to mid-sized companies that must use less than truckload shipping for cost effectiveness. This shipping alternative takes the freight of many companies and fills a truck. The cost is split between the companies using the service. Both types of software can be used to perform better management of freight. This work can also be contracted to third party logistics experts. What most companies find is that the software gives them better control and is a much smaller, reliable investment. The struggling economy has left many companies trying to determine how to decrease budget costs so they can continue to be profitable. Logistics is one way to lower shipping costs and manage company freight. By being able to maximize the load capacity and pick the best routes, costs are drastically decreased making the software very useful.

Truckload Logistics Software: How Does It Save Companies Money?

Companies that do not rely on truckload logistics software often result to hiring third party providers. There are many reasons why this does not produce the desired cost savings. Third party providers are in the business to make money as everyone else. They choose routes and carriers that in turn make them a profit. By using managing your own shipping choices, every carrier and route chosen benefit the company and making someone else profitable is completely taken out of the picture. The weakened economy has also caused many third party logistics companies to increase rates. Discounts given by carriers have almost diminished and they must make up for the price difference. These discounts are a main source for their profit. A higher price is charged to your company over the discounted price. Third party providers also only deal with carriers that offer favorable discounts. This reduces the amount of choices available when using these services. Software meant for logistics management removes this entire scenario and puts shipping back in company hands.

Truckload Logistics Software Does Not Have Expensive or Difficult To Implement

Truckload logistics software is not this huge project that will take years to put in place. The software is easy to set up and is done so by professionals. Companies that provide this software make it simple to integrate into existing systems. What should you look for when evaluating software requirements? First, look for a company that uses non-proprietary tools. This reduces dependency on the software provider when something changes with your business or the technology being used. Software that operates with common operating systems and has non-dependent tools and utilities will work better in the existing technological environment. It will also be easier to use, more familiar, and cost much less. With the right company and software, implementation can be very simple. The upfront cost of purchase and set up is fractional compared to the amount of money saved on shipping.

Logistics Software Solutions Vs Hiring a Parcel Rate Adjuster

Parcel carrier rates aren’t designed to help your company reduce shipping costs; they’re designed to support the profits of parcel carriers. You won’t hear it in their advertisements, but parcel carriers have an inflexible set of standard rates that give the appearance of flexibility due to a set of pricing algorithms that determine how the rates are applied. So, how do you keep your shipping system from being a financial casualty of the parcel carrier system? The first step is a simple: avoid being convinced that one parcel carrier is somehow “better” than the rest. When people arrive at this perception, it’s often in response to advertising ploys that promote notions of a carrier’s “nobility” via its selfless dedication to the customer.

When businesses become dedicated to one carrier, they typically stop shopping for better parcel shipping rates and end up paying for services that they don’t need. Therefore, step two of assuring that your company gets the best carrier rates is either having a parcel rate adjuster investigate your situation or implementing transportation logistics software. Both transportation logistics software and parcel rate adjusters offer extensive logistical information that reveals fair courier rates for a variety of shipping situations, including the comparative analysis of fuel surcharges between carriers and audits of shipping fees that uncover breaches in service, such as non-delivery of services or service delivered too late. Logistics software and rate adjusters also determine whether your company is being charged for services that it simply doesn’t need, such as residential delivery or Hazmat shipping services.

When you consult logistics software or a reputable rate advisor, you can expect to receive detailed questions about what you ship and how you go about shipping it. In each case, cost savings suggestions are often simpler than expected. For example, a Philadelphia law practice was able to save $15,000 a year in shipping costs by determining when parcels were expected instead of sending every parcel overnight. Why didn’t the firm do this in the first place? In the legal profession, the “importance” of legal documents leads to the perception that they need to be delivered as quickly as possible, even when they don’t. Similar to seeing through advertising ploys, simply seeing through the trends in your business area can result in significant parcel savings.

Arriving at the best shipping plan for your business involves selecting the shipping options that meet your specific needs and then finding them at the best price. While some companies choose to consult with a rate advisor, other companies choose to implement logistics software and save money. In addition to being more cost effective than hiring a parcel rate adjuster, logistics software solutions arrive in a shorter period of time and are always free of human error. If you suspect that you’re paying too much for parcel shipping or you haven’t compared rates in awhile, why pay even more by hiring a parcel rate adjuster when logistics software solutions can offer you more dependable results in a shorter period of time and at a lower cost?

Operating a Transportation Management System Using Logistics Software

A Transportation Management System (TMS) is an element of supply chain management that is positioned between a company’s Enterprise Resource Planning (ERP) system and its shipping process. Ultimately, the system ensures that a company’s resources are invested in the best transportation process for its freight, one that offers the best combination of freight care, delivery time, and delivery cost. Supporting the system’s management function is a logistics resource, typically either (a) an in-house logistics department, (b) a Third Party Logistics provider (3PL) or (c) logistics software. How well the system works – and the style of management it offers – depends largely on the logistics resource.

Evaluating Logistics Resources

Most shippers prefer to have logistics performed in-house. Traditionally, this requires hiring experts – something that is common among large, high volume shippers that have a transportation fleet, but not among small to medium size shippers that don’t have a fleet. For these shippers, the traditional alternative to hiring experts is contracting with a 3PL provider – an arrangement whose value depended on the practices of the 3PL provider. For many companies, 3PL providers present three problems:

  • They make the transportation management process seem distant
  • Their load pairing strategies aren’t based on the broadest options
  • Their highest level of transportation management can be unaffordable

In recent years, logistics software has provided shippers with an alternative to high level 3PL, one that is capable of managing the shipping process and discovering better shipping options as they arise. In addition to costing less than a 3PL provider that manages and innovates the shipping process (i.e. a customer adapter), the software lets shippers take control of their TMS by facilitating three functions that a good TMS should facilitate:

  • Planning the shipping process. A TMS should plan the shipping process according to the shipper’s parameters, which include such things as LTL rates, delivery time and warehousing fees.
  • Monitoring the shipping process. A TMS should monitor the shipping process in an administrative capacity, handling such things as transport alerts, customs clearance and invoicing.
  • Measuring Key Performance Indicators (KPIs). Without the consistent, accurate measurement of KPIs, a shipper can persist with shipping options that don’t offer the best value.

Logistics software can facilitate these functions, allowing shippers to have the logistics function in-house without investing a significant amount of capital to have it there.

Conclusion

Companies that ship products need an effective transportation management system, which means that they need a comprehensive logistics function. Traditionally, shippers have acquired this function by hiring in-house experts or contracting with a 3PL provider. Today, however, logistics software gives them the opportunity to have the logistics function in-house without paying a premium to have it there.

For small to midsize companies, hiring in-house experts can be cost prohibitive, and contracting with a 3PL provider can bring the feeling of being disconnected from the shipping process. Logistics software can resolve both issues by offering a complete logistical function on a Software as a Service (SaaS) model.