TL Logistics Management Software – Is it Right For Your Company?

To those not familiar with the shipping process, transporting goods from one point to another can seem as simple as partnering with any given carrier. But for those who are familiar with the process, especially companies that ship on a regular basis, achieving an optimal shipping arrangement is understood to be as difficult as it is. However, the larger a company grows and the more goods it ships, the more opportunities it has to save money through shipping arrangements, one of which is truckload (TL) shipping, where a company ships full semi trailers of goods direct to destination, improving delivery time and reducing shipping costs by avoiding warehousing and freight handling fees.

To discover whether TL shipping is an option for your company is as simple as determining whether you ship enough goods to, when packaged and loaded properly, full semi trailer. But ensuring that you arrive at the best form of truckload transportation management can be more difficult, as companies are generally presented with three options when attempting to achieve the best oversight of their TL shipping process: hiring an in house logistics expert; contracting with a third party logistics provider; or implementing TL logistics management software-also known as truckload logistics software-which performs the work of a logistics expert and lets companies choose from among ranked TL shipping options through a user friendly interface.

As one might expect, the preference of most companies is to have their own logistics expert, especially considering that the biggest complaint of 3PL customers is the distance between the provider and the customer, leaving customers feeling as if they have little control over their own shipping process, which is somewhat true. Regardless of the type of 3PL provider a company contracts with (standard 3PL provider, service developer, customer developer, or customer adapter), the provider assumes control of a certain part or the entire function of the shipping process. Yet, many companies feel compelled to contract with 3PLs that offer singular services-with TL shipping being one of them-to save money on the shipping process.

Compared to the $70,000-$90,000 salary earned by experienced logistics experts, contracting with a standard 3PL provider or a service developer, both of which offer particular services instead of a comprehensive approach to the shipping process, costs less. But the savings often come at price: not realizing a meaningful range of TL shipping solutions. In many cases, standard 3PL providers and service developers place their customers with carriers that offer a discounted shipping rate to the 3PL, which the 3PL then charges the customer over and above to make a profit from the arrangement.

When companies grow tired of dealing with 3PLs for TL shipping solutions, they often turn to full truckload logistics software, which cuts the middleman out of the shipping process and lets a company become its own logistics provider. Upon implementing the software, companies save money by both eliminating the need for 3PL and realizing more cost effective shipping options, with research showing that companies can reduce the annual cost of their entire shipping process by 10 percent after only the first year.

TL Logistics Management Software is Essential to Cutting Shipping Costs

When companies grow large enough, they typically purchase their own shipping fleet and have a logistics department that manages their shipping process from a variety of vantage points. But for small to midsize companies that don’t have a shipping fleet or an in-house logistics team, carrying out and managing their shipping process means outsourcing their transportation logistics or trying to choose the right shipping options on their own. In most cases, these companies trust a third party logistics (3PL) provider to provide the best TL shipping solutions for their unique distribution needs. However, to save money and have more control over the shipping process, more and more companies are turning to truckload logistics software-also referred to as TL logistics management software. In addition to allowing small to midsize companies to become their own logistics provider, freight logistics software helps them save money with respect to the following areas of the shipping process: freight management, transportation execution and freight payment and audit.

Freight Management

Freight management amounts to managing each means freight distribution, including but not limited to: small parcel, less than truckload (LTL), full truckload (FTL), rail and sea. While large companies employ logistics professionals or construct internal freight councils, small companies typically either outsource freight management or defer to purchasing personnel or shipping or warehouse managers. By implementing TL logistics management software, companies realize more shipping options than they do from outsourcing to a 3PL provider. Because 3PL providers only use carriers that they can make the most money with, your shipping options with 3PL providers are limited to what makes the best sense for 3PL providers and not necessarily for your company.

Transportation Execution

Traditionally, transportation systems are designed for tendering outbound shipments, meaning that they aren’t designed for managing inbound and third party shipments. In addition, parcel carriers have compliance requirements that cause shippers to use a separate system for parcel processing, leading to higher freight costs. Ultimately, shippers have a difficult time keeping their freight from being tendered outside of their original pricing agreements and end up overpaying for freight transportation. To remedy this situation, TL logistics management software allows companies to enforce internal and external compliance throughout the shipping process with regard to the carrier pricing agreement.

Freight Payment and Audit

TL logistics management software allows you to combine your freight payment and pre-audit data, which gives you limitless reporting options concerning your freight spend. With the combined information uploaded to the software application’s dashboard to give you almost real time visibility of your freight spend, you can to monitor freight KPI’s on a daily basis to further control shipping costs as KPI’s change. The freight payment and auditing capabilities of truckload logistics software also allow you to receive more of your freight bills through EDI, which serves to lower your pre-audit costs.

TL Logistics Management Software – Is It Better Than Third Party Logistics?

For companies that ship their goods by ground, using truckload (TL) shipping arrangements is key to reducing the cost of the shipping process while improving delivery time. TL shipping occurs when a shipper contracts with a carrier to ship full semi trailer loads of goods to a specific destination-a scenario that represents the opposite of less than truckload (LTL) shipping, where companies that ship less than full semi loads combine their loads to form a full load and share the price. Unlike TL shipments, which are valued for their timeliness, LTL shipments are prone to numerous pick up and delivery stops, and can result in unwanted warehouse fees.

Even if your company qualifies for truckload shipping arrangements, it still needs a way to arrive at the best arrangements for its situation-a need that can be met through one of three scenarios: hiring in house logistics experts, outsourcing to third party logistics (3PL) providers, or implementing TL logistics management software. Traditionally, companies have pursued hiring their own logistics experts; or, if developing a logistics department proved unaffordable, outsourced their logistics to a 3PL provider. But today, more companies are choosing to implement logistics software, of which TL logistics management software is one type, to arrive at the best shipping arrangements.

Compared to hiring in house experts or outsourcing to 3PL providers, TL logistics management software brings two advantages: it costs less, and it results in more shipping solutions. By allowing companies to become their own logistics providers, logistics software cuts the middleman out of the shipping process-a move that can save larger companies six figures annually. But the software also cuts down on the cost of shipping by performing shipping route analysis and optimization and analysis of integrated shipping solutions to a degree unavailable through 3PL providers.

An example of how TL logistics management software can benefit the truckload shipping process is as follows: upon performing route analysis in relation to integrated shipping options, the software might determine that shipping a load by truck half way to its destination and shipping it rest of the way by air would provide the lowest shipping cost and best delivery time. If a company used a 3PL provider, this scenario would only occur under two circumstances: if a non-asset based 3PL provider had a financial relationship with a trucking carrier and an air carrier whose routes could intertwine, or if an asset based 3PL provider owned the right assets to make such a situation financially favorable.