Shipping Management Software Vs Freight Brokerage: Which Is Better?

Many shippers spend nearly as much on shipping as they do on payroll. Consequently, they look for ways to improve freight management with the goal of reducing freight costs. When creating a logistics department would be too expensive, most shippers implement logistics software or hire a freight broker. Also known as shipping management software, logistics software allows shippers to become their own logistics provider by supplying them a comprehensive logistics function. Also known as Third Party Logistics (3PL), freight brokers make carrier arrangements on shippers’ behalf.

Both options can yield solutions that combine quick delivery time, excellent freight care, and affordable rates. But logistics software offers certain advantages that freight brokers often don’t, beginning with low service cost.

Low Service Cost

Not all brokerage options require a significant investment. But the ones that don’t are oriented toward specific logistics services (e.g. cross docking, and tracking and tracing), not comprehensive solutions. For complete management of the shipping process via 3PL, a shipper must use a customer adapter or customer developer, which could cost as much as maintaining a logistics department.

Excellent Customer Service

The number one complaint among 3PL customers is a feeling of distance from the shipping process. In many instances, this is the result of what 3PL is supposed to do: take the logistics function out of a shipper’s hands. But many shippers discover they want more control over shipping than they first believed. Logistics software eliminates distance between the shipper and the shipping process by allowing the former to become its own logistics provider.

Broader Shipping Options

A freight broker will provide more options than you could realize on your own, without the aid of logistics software. But those options could be limited compared to the options offered by logistics software. Some freight brokers use electronic posting systems, where available carriers are matched with available loads, to arrange shipments. While using these systems is a valid strategy, it should not be the only strategy, as it often is. Logistics software empowers shippers to form relationships with carriers who don’t use posting systems.

Control of Shipping

Almost every shipper wants control of the shipping process. But when creating a logistics department would be too expensive, many shippers relinquish the process – and control – to a 3PL provider. Logistics software gives you the same control over shipping as a logistics department would, but a fraction of the cost. If problems arise with the software, or if you need new logistics options, the software provider can resolve the problem or make the necessary changes.

Conclusion

The shipping process involves significant costs, which can be mitigated by implementing a strategic logistical solution for transportation management systems. Although freight brokerage is a valid option, it often lacks basic benefits that shipping management software always provides: low service cost, broad shipping options, and control of the shipping process. Logistics software is often advertised as a solution for small to midsize shippers, but it can also benefit large shippers who wish to save money by not hiring a team of in-house logistics experts.

How to Improve The Business With Logistics Software

The technological development in each field of the market was soon followed by evolutionary steps of logistics softwares and IT companies. Today there are many software companies that provide the highest quality and friendly software solutions to the Transportation Industry. Their softwares are designed to be industry oriented from the ground up. The industry-oriented approach is reflected by their market focus, products, service offerings, the customer support, and the talent base they employ.

True professional companies always stay on the cutting edge of technology innovations to deliver state-of- the art solutions to their clients. Therefore, if you have an important business to run in the transportation industry, you would better not waste anymore time and purchase at least a lite logistics suite, an affordable, but still a powerful one. Its solutions may include Freight Forwarding Software, Purchase Order Management, Real-Time Online Cargo Tracking, Inventory Control Software, Third-Party Logistics System (3PL), Trucking Software with Cross-Dock and Dispatch, Integrated Accounting Software and many more.

A Freight Forwarding Software, for example, is designed especially for small Freight Forwarders and Warehouse Management Companies. It can handle Ocean Freight, Air Freight along with Warehousing. Newest version releases have taken the request of customers in consideration and added the QuickBooks export support. That means that now you can easily export invoices to QuickBooks, saving time and reducing errors.

A lite suite version will be able to handle all the requirements of a Cargo Warehouse operation including Warehouse Receives, Warehouse Withdraws, Labels, On Hand Reports and Invoices. The Ocean Export and Air Export modules may provide an array of features like Quotes, Bookings, Manifest, Labels, Waybills (Houses, Masters, Directs) and reports that will let you keep track of your company operations at all times.

Still, if you can afford to spend more, there are more powerful softwares that will offer access to cargo status information directly through your company’s internet website, providing your customers with a powerful online shipment tracking tool. Authorized users can search, view and print information in various forms, such as: Warehouse Receipts, House Airwaybills, Master Airwaybills, House Bill of Ladings, Master Bill of Ladings and Cargo Manifest.

A complete featured suite offloads much of the administrative overhead associated with addressing client shipment inquiries, helping you to reduce cost and increase employee productivity. Also agents can enter POD information without having to call your office. They may also keep track of all cargo going to their office.

Usually, the software companies understand how critical it is for their clients to have their logistics software running 100% of the time. That is why they give their support department the higher priority. Any technical support team is committed to provide superior support service, and is available twenty four hours, seven days a week.

The companies’ staffs now understand that today is not only the software, but also the customer support that is critical to the clients. Their goal should be to build a relationship of trust with their customers and that is why 24/7 support is absolutely necessary to be provided. This kind of support can easily be achieved using the technology of the Internet. If one is interested in any of their products or services, he/she should be able to visit a contact page for more information, at least on how to get in touch with them. Also, if a customer has non-time critical issues or just has some questions, an e-mail should be provided for any inquires or an online support request form. Any problem should be resolved within a few hours, if the service is professional.

Think about the advantages of purchasing a logistics software! It will improve your time and experiences in your business area.

Advantages of Logistics Software Over Third Party Logistics

For manufacturers who ship a steady supply of cargo, the cost of shipping can rival the cost of payroll. Consequently, reducing shipping costs is a full-time task for most shipping managers. Today, most shippers manage the logistical side of shipping (the part of the shipping process where costs can be cut) with one of the following resources:

  • In-house Logistics – A model of shipping logistics in which the shipping process is managed by a shipper’s own staff of experts.

  • Third Party Logistics (3PL) – A model of shipping logistics in which a third party manages one or more aspects of the shipping process.

  • Logistics software – A web-based or in-house program that allows shippers to choose its own shipping arrangements and perform important tasks such as a freight audit.

Most shippers prefer the first option, but paying a team of experts can be unaffordable. Left to choose between the second and third options, many shippers choose the latter based on the following considerations:

Cost

The cost of 3PL is based on the services a shipper receives. When a shipper receives only a few services through a standard 3PL provider or a service developer, 3PL can be affordable. However, when a shipper uses the comprehensive services of a customer adapter or customer developer, the cost of 3PL can be significant. A software-based resource can facilitate comprehensive shipping management for a fraction of the cost of high-level 3PL services.

Shipping Options

Some 3PL providers make carries arrangements using a narrow range of carrier options, such as those found in an electronic posting system. Conversely, logistics software allows shippers to choose from a limitless range of shipping options based on the appropriate shipping model (e.g. less than load or truckload), and perform a freight audit to monitor shipping costs.

Control

Shippers who use 3PL commonly complain that the shipping process feels too removed-a complaint that often results from the failure of a 3PL provider to provide ongoing, in-depth communication to the customer. Using a software-based resource eliminates this issue by placing the shipper in full control of the shipping process.

Permanence

When shippers use 3PL, they often go through multiple 3PL providers as their shipping process evolves, beginning with a standard 3PL provider and eventually using the services of a customer adapter or customer developer. In addition to being more expensive than using a software-based resource, switching from one 3PL provider to another requires forming new business contracts, continuously delegating more shipping tasks to a third party, and implementing new standards for quality control.

Most shippers wish to implement a permanent logistical solution as soon as possible, and implementing a software-based solution is the best way to do it. After the solution is implemented, it options can be changed as the shipping process changes, providing a seamless transition that does not require the customer to look for a new service provider.

Conclusion

For many shippers, logistics software is the most cost effective logistical resource. In addition to allowing shippers to choose from the broadest range of carrier options, it allows them to perform important tasks (e.g. freight audit) without the assistance of a third party. To learn more about the benefits of software-based logistics, contact a provider of transportation software.

Performing a Logistics Audit: An Overview for Shippers

Shippers should perform an annual logistics audit to monitor the cost and regulatory requirements of the shipping process. They should also implement a freight audit process to analyze shipping invoices for billing errors. By doing these things, shippers maintain an economical shipping process, avoid fines from regulatory violations, and avoid overpaying for cargo services.

The Logistics Auditing Process

Logistics auditing has six phases that are traditionally carried out by team of experts who work in-house, or by a Third Party Logistics (3PL) provider. The process can also be facilitated by Transportation Management System (TMS) software – an excellent option for companies that need affordable shipping solutions. When TMS software is used, some of the following phases can be shortened or eliminated:

  • Preliminary study of the shipping process
  • Supply chain strategies are linked to company objectives
  • The service agreement is negotiated
  • The auditing phase commences
  • The reporting phase commences
  • Changes are made to the shipping process as needed

Performing a logistics audit with TMS software shortens the preliminary study of the shipping process (a phase in which a third party must become familiar with the shipping process by interviewing the client’s employees) and eliminates the need for a service agreement with a 3PL provider. Using TMS software is more affordable than using a 3PL provider and it shortens the auditing process.

The Freight Auditing Process

Because analyzing every shipping invoice at year’s end would require an extraordinary effort, invoices should be analyzed as they arrive. A process that has four phases, freight auditing is performed by experts who work in-house, by a 3PL provider, or with the help of TMS software. Below are the four phases:

  • Invoices are received and entered into the auditing system
  • The invoices are checked for accuracy
  • Inaccuracies are coded and reconciled
  • The invoices are paid

A freight audit traditionally involves three parties: the shipper, the carrier, and a third party that receives, analyzes and reconciles the shipper’s bills. Using TMS software is more cost effective than using a 3PL provider, as it eliminates the need to pay third party experts.

Conclusion

Performing an annual logistics audit and implementing a freight audit system to analyze shipping invoices has three main benefits:

  • The shipping process remains as economical as possible
  • The shipper avoids fines from regulatory violations
  • The shipper does not overpay for cargo services

For many shippers, the cost of shipping rivals the cost of payroll, and implementing a topnotch auditing process can save thousands of dollars annually in shipping costs. To maximize the savings, shippers must implement the most cost effective logistics resource. Today, that resource is logistics software.

Logistics software is tailored to the customer’s shipping process. If the customer requires a resource for transportation management, the software is configured to monitor the transportation management system. If the customer requires a resource for a shipping model (e.g. LTL shipping), the software is configured to monitor the shipping model. To learn more about the benefits of the software, contact a provider of web-based logistics solutions today.

Logistics Software Aids in Retail Vendor Compliancy

Vendor compliancy occurs when a vendor meets a set of requirements imposed on it by a buyer of its products. Vendor compliance focuses on making it easier for the buyer to receive goods, process them upon reception, and bring them to store shelves, where applicable. Unfortunately for manufacturers, the most complex compliance standards are usually handed down by companies that have the largest buying power, a fact that causes some companies to question whether the money necessary to implement the standards would be worth the profits that resulted from doing business with an entity. In the long run, adapting business standards to meet compliance standards is almost always beneficial, as nothing can replace the selling power of having large contracts with major companies and retailers. However, affording the infrastructure necessary to facilitate compliance can still be a problem in the short run.

Retail Vendor Compliancy and Logistics Software

When you look at a major buyer’s retail vendor compliancy scorecard, a rating system that ranks vendors according to their compliance to a number of requirements, it’s often difficult to ascertain how to begin meeting the requirements. However, upon closer inspection, many companies find that a majority of compliance issues, and certainly the most critical ones, are associated with the shipping process, such as product labeling, product packaging, and method of shipment, to name a few. Yet, here there emerges another roadblock for many vendors: how to gain more control over the shipping process through logistics. Most companies receive their shipping logistics from one of three sources: an in-house logistic department, a third party logistics (3PL) provider, or by implementing logistic software, which allows you to become your own logistics provider without possessing logistical expertise.

In-House Logistics

Meeting shipping needs in-house is the traditional preference of companies that can afford to hire their own logistic experts, who typically earn around $80,000 per year. This fact alone prevents many companies from going in-house with their shipping process, as well as the fact that most companies pursue in-house logistic arrangements upon purchasing their own fleet, once and for all ending their dependence on 3PL.

3PL

What you receive from 3PL depends entirely on what type of 3PL provider you contract with: standard 3PL providers, who offer basic shipping services and seldom practice shipping logistics as a core practice; service developers, who offer more specialized services but not a comprehensive approach to the shipping process; customer adapters, who manage an existing shipping process but don’t propose new solutions; and customer developers, who manage the shipping process and do propose new solutions. For vendor requirements, customer developers make the most sense. But you can receive the same level of focus through logistic software at a fraction of the cost.

Logistics Software

Also referred to as freight transportation software, logistic software is priced as a software as a service (SAAS) offering, making it less expensive than other logistic options. What this means for vendors is less money spent on meeting vendor requirements, and an annual reduction in shipping expense that can be delegated toward other compliance needs. After using freight transportation software for one year, most companies experience a 10 percent reduction in shipping expense that increases in years following.

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