Logistics Software Solutions – How Do They Compare to Third Party Logistics?

Third party logistics (3PL) is the most popular choice for freight logistics among small to midsized companies. In order to help companies that regularly make shipments that are too large to financially benefit from parcel shipping and too small to financially benefit from full truckload (FTL) shipping, companies turn to third party logistics providers to get them the best deals on less than truckload (LTL) shipping, integrated shipping methods and to reduce the delivery of products to retailers. To these ends, 3PL providers significantly reduce their clients’ shipping costs compared to what they would spend on shipping without the aid of freight logistics. But they obviously do so by charging their clients for freight logistics services.

So, what’s not to like about hiring a 3PL provider to reduce your company’s shipping costs and ensure that your goods are delivered in a timelier manner? After all, is there really such a thing as realizing freight transportation solutions without seeking the help of freight logistics experts? Yes and no. If freight logistics isn’t one of your company’s core competencies, you’ll certainly need to get logistics solutions from those that specialize in providing them. But you don’t have to turn to a 3PL provider and pay a middleman to provide you with shipping solutions when you can instead use online logistics software.

The difference between 3PL and logistics software solutions-also referred to as logistics management software-typically doesn’t lie in one having more logistics expertise than the other; rather, it has to do with how the logistics information is supplied, how much it costs and how much control companies have over their shipping process. Essentially, a third party logistics provider uses logistics management software to provide you with shipping solutions, whereas online logistics software lets you act as your own logistics provider for an affordable monthly fee. In no case will you find a 3PL provider that offers their services for the low price that you pay for logistics software solutions, nor will hiring a 3PL provider offer you as much control over your shipping options.

Having complete control over your shipping process has two main benefits: you can research the companies that you’re considering hiring and you never have to deal with a middleman’s business policies affecting the price or availability of certain shipping options. Aside of the financial and shipping management benefits offered by logistics management software, its greatest strength is its extreme ease of use. Although the term logistics software implies computer expertise, logistics software comes with an easy to use interface that neither requires expert computer knowledge or expertise in logistics, meaning that each of your company’s departments can be involved in its shipping process.

Overcome Shipping Obstacles With Reliable Shipping Software Solutions

The shipping industry is one of the most valuable and rapidly growing industries in the international business field today. without over-the-sea trading, economies will deteriorate because businesses will have very limited options to import and export goods to other countries.

Virtually all activities performed in the liner industry involve significant labor costs and time critical processes. As global trade rises, the pressure on shipping companies also increases. The demand for better customer service delivery and industry excellence keeps growing, and changes need to be made in order to sustain reliability of operations. This is the primary reason why shipping companies need to adopt modern sea freight technology and use cutting-edge shipping software solutions.

There are many areas of the shipping business that can be refined with the utilization of shipping software solutions. Principals, agents, feeder or short sea business, NVOCCs, and terminal and port operators – all parties involved in the shipping process can benefit from adopting modern shipping technology that offers software integrity and user-friendly features.

Software suites such as LIMA enables principals to combine full business functionality with a Windows-standard and easy-to-use interface for management and staff members. This line management software application addresses and resolves problems in schedule management, voyage management, CRM, cost management, equipment handling, accounting and data management.

Agents can take advantage of agency suites such as ALFA to streamline processes for sales and marketing, tariff/quotation/contract management, bookings, B/Ls, manifests, invoicing, dangerous goods handling, voyage account, Intermodal, and Electronic Data Interchange (EDI). With a software application such as ALFA, redundancies are eliminated and work flow is optimized.

For feeder and short sea business, applications such as FAST offer solutions for enhanced booking process, sophisticated invoicing, complex tariff and cost management, and direct linkage to customers and partners to accommodate short transit times and avoid delays in the communication chain.

Software application suites designed specifically for NVOCCs like LIMA NVO provides the vehicle for either regional or global non-vessel operating common carrier businesses to gain competitive edge. Companies have a flexible and scalable software solution to control and monitor all business activities with complete visibility which results in improved staff productivity, tighter rein over contribution margins and revenue, reduced expenses and built-in best practices for enhanced customer service level.

Most shipping software today include applications for improving terminal operations. Terminal management software was developed in order to simultaneously and efficiently handle containerized, RoRo and general cargo for multiple shipping firms. With the use of a reliable terminal management system, operators are rest assured to run their business free from irregularities and hassles, and be able to communicate with agents and shipping firms in an entirely organized manner.

Shipping software solutions were built to facilitate and enhance the effectiveness of all the intricate processes that shipping goods entail. No matter what task is assigned to you, shipping software enables you to do it effectively and competently.

How Does a Logistics Software Solution Compare to Third Party Logistics?

If you’re searching for new shipping solutions, you may have encountered the debate that asks: which is more beneficial to the shipping process: implementing a logistics software solution or outsourcing logistics to a third party logistics (3PL) provider? To answer this question, its helps to consider the three things that every company wants out of the shipping process: cost effectiveness, excellent delivery time, and safe delivery of freight. With these things in mind, we take a look at whether a logistics software solution or a 3PL solution offers the greatest value.

Cost Effectiveness

In terms of cost, you’ll always pay more to receive a comprehensive, innovative approach to the shipping process from a 3PL than you will to implement a logistics software solution, and the reason why is simple: when you hire a full scale 3PL provider (i.e. a customer adapter), you pay a company to do what logistics software does without employing anyone. In other words, the software allows you to become your own logistics provider. Although other types of 3PL providers can be hired for less than the cost of customer developers (i.e. standard 3PL providers, service developers, and customer developers), they don’t provide the same level of service, with standard 3PL providers and service developers only offering specific services, and customer developers handling the full shipping process without proposing new solutions.

Excellent Delivery Time

Excellent delivery time depends on route analysis and optimization, as well as the availability of integrated shipping solutions. In simple shipping situations, route analysis could consist of analyzing route time in relation to distance, road surface quality, traffic patterns, etc., while in complex shipping situations, such as global shipping or moving unfinished products from location to location during the manufacturing process, route analysis could consist of the strategies mentioned above along with developing integrated shipping arrangements that could combine road, air, sea, and rail shipping, or any combination thereof. Improved delivery time can be achieved with both logistics software and 3PL. But logistics software, due to its impartiality, will present a broader range of options.

Safe Delivery of Freight

The safe delivery of freight is achieved through freight optimization, particularly in terms of using the right stacking strategies and ensuring that like products are shipped together. The cost of broken freight is perhaps the least mentioned aspect of shipping cost, and preventing it from happening can be achieved with either 3PL (e.g. standard 3PL provider or service developer) or logistics software. However, unless a shipper is looking for freight optimization alone, using logistics software would be the better choice financially.