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 Transportation Software - How Does It Compare to Third Party Logistics?

If your company has grown to the point that it is ready to start shipping its goods to other states, then you've probably heard more than your fair share of transportation logistics talk. In the freight logistics industry, you'll rarely meet someone that seems as if they don't know what they're talking about, and each consultant or company can tell you why their logistics solutions are the best.

So, how do determine the good from the bad and mediocre from the awful? To put first things first, your initial concern with achieving the right shipping solutions should be how much they cost versus the benefit that they'll deliver. With this in mind, most midsized and growing companies that have truckload (TL) shipping needs quickly arrive at a crossroads: should they hire a third party logistics (3PL) provider or should they implement TL transportation software?

Also known as truckload logistics software, TL transportation software is offered by software companies that specialize in transportation logistics. TL transportation software can be implemented into your company's shipping process as either an online software application that allows for remote access or an internal application, depending on your wants and needs. In either case, the software comes with an easy to use user interface that allows you to become your own logistics provider.

When you opt for logistics software, you don't have to hire logistics professionals to operate the software, and that's where part of the cost savings comes in versus hiring a 3PL provider. When you hire a 3PL provider, you're paying for logistics professionals to act as middlemen between your company and freight carriers, whereas with logistics software, you're paying for a computer application that has been developed by logistics professionals.

In addition to costing less as a service, logistics software also gives its users greater control over the shipping process by providing them with more shipping options. Because 3PL providers make their money by charging their clients more than a TL shipping solution actually costs, in order to keep their rates reasonable, they only partner with carriers that offer preferred "discounts". What this means, of course, is that you only have the option of shipping with carriers that allow 3PL providers to make a profit, regardless of whether a non-discounting carrier might be able to save you the most money concerning other shipping cost factors, such as route length.

Some companies are happy to use 3PL providers because they simply don't want to handle logistical concerns. But this attitude is usually based on the idea that, if a company doesn't boast logistics as one of its core competencies, it won't able to handle transportation logistics. When you opt for you opt for TL shipping software to achieve TL shipping solutions, you quickly realize that this isn't the case. While 3PL can certainly provide you with valuable TL shipping solutions, there's simply no need to spend extra money and have a decreased range of shipping options when you can easily handle your own logistics with the aid logistics software.

If I sound passionate about logistics software, it's because TL transportation software has allowed my midsized company to significantly reduce its shipping costs after one year (almost a 10 percent reduction and growing). Like many small to midsized companies, I once outsourced my logistics. But when I took a chance on logistics software, I realized that the claims were true: I could successfully arrive at my own TL shipping solutions.