TL Transportation Software - Is Management Based Third Party Logistics a Good Fit?

In the debate between whether it's better to use TL transportation software-also known as full truckload logistics software and truckload logistics software-or third party logistics to arrive at the best TL shipping solutions, cost effectiveness and range of shipping options are the two most mentioned factors in favor of TL transportation software. And it's true: because management based third party logistics providers charge their clients more than shipping arrangements actually cost in or to earn their profits and only work with shipping carriers that provide the best rate discounts to make those profits possible, logistics software is an easy to use money saver that presents companies with an increased rage of shipping options. But as if this weren't enough, there are some other critical reasons why you should choose truckload logistics software over third party logistics.

Range of Services

Because every company's ideal TL shipping solutions are different, you have to make sure that a third party logistics provider offers the range of services that you need; and considering that a company's shipping needs can significantly change as it grows or decides to produce new products, it's difficult to predict that you won't need certain services at some point in the future. In fact, you could even get stuck in the position of having to fulfill a contract when a provider can't meet all of your needs. With logistics software, on the other hand, the software provider re-customizing your software options can easily tend to your new shipping needs.

Financial Soundness

In the past two years, a significant number of third party logistics providers have gone out of business or been consolidated. What this meant for their customers is exactly what it sounds like: they had to rush to form new contracts with another provider in order to keep their shipping process on track, and choosing a logistics solution in a rush is contrary to the nature of logistics. When a down turned economy starts affecting the trucking industry, carriers aren't able to offer management based third party logistics providers the same level of discounts that they used to, which leads to providers raising their rates, losing customers and eventually being consolidated or folding. The financial health of logistics software isn't based on the carrier industry, but on the freight transportation software business, which is currently booming.

Range of Control

Regardless of which type of third party logistics provider you contract with-asset based, management based or an integrated provider-you're entering a situation where another company will control your transportation logistics. The value controlling your company's operations should be based on what you lose as a result of not controlling them and not on the mediocre notion that being "in control" is automatically better than letting another company help you with its expertise. But the one thing that you always loose by opting for third party logistics is the ability to continually optimize your shipping process and realize increased cost savings and, in many cases, improved delivery time. When companies switch to logistics software, research shows that they can reduce their overall shipping costs by 10 percent at the end of one year.

Full truckload logistics software has significantly cut my company's shipping costs. To see how truckload logistics software can help, visit RateLinx.com.

TL Shipping Software Versus Management Based Third Party Logistics - Which is Better?

Truckload logistics software is increasingly becoming the logistics solution of choice among small to midsize companies that don't employ logistics professionals. In most cases, companies that don't employ logistics experts or use logistics software turn to third party logistics providers to handle their truckload (TL) shipping solutions. Companies may choose third party logistics providers for a variety of reasons, but two factors that generally influence this decision are companies' perception that they can't handle their own logistics and the corollary perception that only companies that specialize in transportation logistics could yield the most optimal TL shipping solutions. Converse to these perceptions is the fact that many companies that lack core competency in logistics are now acting as their own TL logistics providers by using truckload logistics software. With an easy to use interface and customizable options that reflect a company's particular shipping needs, TL shipping software offers companies an increased range of shipping options at a lower price than third party logistics.

Perhaps the greatest advantage of third party logistics is that allows companies to be free of the logistics process. However, the price that companies can pay for this negligible freedom can be costly. Management based third party logistics providers make their money by acting as middlemen between shipping companies and carrier companies, securing rate discounts from carriers and charging clients a significant amount above the actual shipping cost in order to make a profit. But in additional to simply costing more money than using logistics software, third party logistics poses another problem: because management based logistics providers only work with carriers that offer preferred discounts, they potentially exclude carriers that could offer their clients the best overall shipping solutions. When companies choose logistics software instead of renewing their contract with a third party logistics provider, they have the opportunity view a full rage of shipping options and choose those that benefit them and not a third party's business interest.

When you consider the factors that go into determining the best TL shipping solutions, that management based third party logistics providers only consider carriers that offer a preferred discount is shocking. For example, freight optimization, shipping route optimization and the potential for integrated shipping methods are three bargain basement factors that significantly influence the overall cost and delivery viability of a TL shipping solution. Unlike third party logistics, TL shipping software examines these and other factors simultaneously, eventually identifying the best carrier in relation to each factor. Third party logistics is an expense that never goes away. Companies have no insight into their own logistics process and therefore remain trapped at the hands of profiteering logistics experts. But when companies switch to TL shipping software, they don't just get rid of the cost that comes with paying a middleman; the increased range of shipping solutions that they experience allows them to drastically cut their shipping cost. Research shows that companies that implement logistics software can decrease their total shipping costs by 10 percent at the end of one year.

For my company's TL shipping solutions, I use truckload logistics software. If you're interested in doing the same, check out RateLinx.com.