When a shipping company invests in logistics solutions, its main goal is to achieve shipping optimization, which focuses on expediting the shipping process while driving down its cost. But it’s important to realize that the cost of a logistics solution is also part of the cost of the shipping process. To achieve freight optimization, shipping companies have three choices: they can hire their own logistics experts; outsource their logistics needs to third party logistics (3PL) providers; or implement logistics software, which allows them to serve as their own logistics provider. For most companies, hiring their own logistics delivery service experts is the preferred solution, but not for the reasons that one might suspect. Compared to 3PL, which shippers regularly complain makes them feel distanced from their shipping process, an in house logistics department results in what every shipping company wants: total control over the shipping process. Yet, this is exactly what logistics software offers, and at a fraction of the price.
Traditionally, companies that can’t afford their own logistics department turn to 3PL. But the type of 3PL provider that offers the comprehensive, innovative approach offered by a logistics department can be as expensive as hiring a logistics expert, which means that small to midsized companies often turn to lower level 3PL providers (standard 3PL providers and service developers) that don’t offer comprehensive, innovative approaches to shipping optimization. Gradually, however, this trend is changing, especially as companies learn that you don’t need logistics expertise to operate logistics software. Developed by logistics experts, the software does the work of a logistics expert, presenting shippers with optimized solutions that they can choose from by using a user-friendly interface.
Using logistics software is essentially like having your own logistics department, but without the salary and other headaches that come with personnel. As a result, even companies that grow large enough to afford their own logistics team are instead opting for logistics software. In terms of shipping optimization, the software offers the same route planning and optimization and load optimization solutions that a logistics department would. Concerning route planning and optimization, the software offers the following benefits, among others: reduction of distribution costs and miles, decrease in routing time and contingency planning. Concerning load optimization, the software allows shippers to complete accurate and quick load design for different route types, employ multiple loading strategies, pre-build orders and select load designs that reduce product breakage.
Whether your company needs logistics solutions in the first place or its partnership with a 3PL provider isn’t offering the desired level of freight optimization, implementing logistics software can dramatically improve the quality and decrease the price of its shipping process. Research shows that shippers who implement logistics software can reduce their shipping costs by 10 percent after only one year.