LTL Software: An Overview

LTL Software: An OverviewSmall and medium size shippers often need Less than Truck Load (LTL) shipping arrangements to move their freight. Unlike Truck Load (TL) shipping, in which cargo from a single shipper fills a semi trailer, LTL shipping fills a semi trailer with cargo from two or more shippers. After splitting the cost of the load, each shipper pays less for shipping than it would if it used TL shipping.

As with any shipping arrangement, maximizing the benefit of LTL shipping requires shippers to locate the best rates. To do so, many shippers use logistics software.

Logistics Software among Other Resources

Logistics can be defined as “The detailed coordination of a complex operation where a small or large group of people and facilities are involved in the movement of materiel, goods, or supplies.”

Logistics software is an application that helps shippers choose the best shipping solutions by supplying the logistics function. In the absence of the software, a traditional logistics department or a third party logistics (3PL) provider would supply the logistics function. For businesses that have a limited budget, hiring a team of logistics professionals, or paying a 3PL provider to manage the shipping process, is often unaffordable.

Logistics software is an affordable alternative to these options, as it allows shippers to manage the shipping process without investing significant capital in the management function. In addition to improving your bottom line by improving your Transportation Management System (TMS), logistics software can help you profit by replacing a logistics resource that costs more to maintain. If your company needs to cut shipping costs, implementing the software can help. According to research, using tailored logistics software reduces shipping cost by at least 10 percent in the first year.

Implementing the Right Program

To realize the most savings, shippers must implement TMS software that is tailored to their shipping process, and has the lowest collateral costs. Shippers that need LTL shipping would implement LTL software. To minimize collateral costs, they would implement the product on a Software as a Service (SaaS) model, which eliminates the following expenses that come with implementing it on an in-house model:

Product purchase
Installation fee
System maintenance fees
System update fees

Implementing logistics software on a SaaS model is similar to implementing other programs on the same model. The service provider performs a four-step process:

Analyzes your unique shipping process
Creates a program that reflects your wants and needs
Presents the program for your review
Implements the program when you approve it

The program is operable 30-45 days after you approve its implementation, and you can start to see savings within weeks. If your business needs a low cost solution for finding the best LTL arrangements, a SaaS logistics solution is an excellent option.

Conclusion

Now more than ever, companies improve their bottom line by cutting operating costs. For shippers, the shipping process and the logistics function are two areas where operating costs can be cut significantly, and implementing TMS software is an effective way to do it. If your business needs to reduce the cost of shipping and identify better LTL arrangements, implementing LTL software is an affordable way to accomplish both.


TL Logistics Software – Frequently Asked Questions

If you own a growing manufacturing company, chances are that your shipping needs will eventually change. But that doesn’t mean that the shipping process has to become more complex. In fact, producing more goods can actually make shipping simpler, as can be seen in truckload (TL) shipping, where a company ships a full semi trailer of products direct to destination. To arrive at the best TL shipping solutions, companies have three options: hire an in house logistics expert, outsource to a 3PL provider, or implement TL logistics software-also known as full truckload logistics software-which allows companies to become their own logistics provider. Below, we answer some commonly asked questions about a logistics solution that’s quickly becoming preferred to the more expensive, less flexible options or hiring in house experts or 3PL: truckload logistics-software.

What Aspects of the Shipping Process Does the Software Address?

Logistics software addresses the same aspects of the shipping process that a logistics expert or 3PL provider would address, including route analysis and optimization, and freight optimization. However, unlike a logistic expert, it doesn’t require a $70,000-$90,000 salary to do its work; and, unlike most 3PL providers, the range of shipping options it presents are as broad as possible.

Do You Need Logistics Expertise to Operate the Software?

One of the biggest misconceptions of logistics software in general is that it requires logistical expertise of its user. When you use logistics software, the software serves as the logistics expert, presenting numerous ranked shipping options and allowing you to choose by accessing a user-friendly interface. The goal of logistics software is to cut the middleman out of the logistic function, and it does this by doing the work for you.

How is the Software Implemented?

Most providers of logistics-software offer it on both a software as a service (SaaS) model and as an internal software solution. In either case, the software is tailored to seamlessly integrate with a company’s current shipping process, and can be easily modified when shipping needs change. In the case of internal software, the provider can usually install the software and the hardware necessary to support it.

How Much Does the Software Cost and How Much Does it Save?

The cost of logistics-software varies widely according to two factors: whether it is implemented internally (more expensive) or as a SaaS solution (less expensive), and the range of logistic options required. However, either solution is less expensive than hiring a logistic expert or contracting with a 3PL provider. Concerning cost savings, research shows that companies who implement the software can reduce their total annual shipping cost by 10 percent in the first year alone.


Instead of Hiring a Logistic Expert, Save Money by Implementing Logistics Software

There are two inherent challenges to running a manufacturing business. The first is producing products that will sell. The second is shipping those products to retailers in a timely fashion at an affordable price. If your company has mastered the first challenge but is still searching for the ideal shipping solutions, you may be on the brink of hiring a logistic. When companies hire a logistic expert, they either hire an in house logistics professional or outsource their logistics to a third party logistics provider when their budget prohibits the former. If this describes your company, it’s important to know that, while hiring a 3PL provider may be less expensive than hiring an in house professional, there is a logistics option that costs significantly less than 3PL, and it exists in truckload transportation management software-also known as logistics software.

When companies hear about logistics software, they often think that it requires logistics expertise. But it doesn’t. Logistics experts tailor logistics software to meet a company’s unique shipping needs and allow the company to meet and control those needs through a friendly user interface. There are several reasons why implementing logistics software is more affordable than hiring a 3PL provider, beginning with the fact that logistics software is priced as a software offering and not a consultancy offering. Although the companies that design logistics-software are software companies, they employ freight logistics experts and are run by business veterans of the freight transportation industry. Another reason why logistics software is less expensive than 3PL is that 3PL arrangements typically result in shippers being charged over and above the actual cost of shipping solutions. When non-asset based 3PL providers secure shipping solutions for their clients, they contract with carriers that offer a discounted rate, allowing the 3PL provider to profit from the differential between actual service cost and service cost as charged.

In addition to being more cost effective than 3PL, logistics software also allows companies greater control over their shipping process by providing more shipping options. Most 3PL providers adhere to rigid shipping heuristics to provide clients with shipping options in the shortest amount of time. Consequently, many 3PL clients end up with shipping options that meet their needs but don’t offer the best possible delivery time at the lowest possible price. One example of how logistics software allows shippers to realize more shipping options can be seen in integrated shipping solutions. Whereas asset-based 3PL providers only offer as many shipping modes as they have equipment to support them, logistics-software allows shippers to integrate truck, boat and air shipping over the course of one transportation route. Whether your company’s shipping needs are just emerging or have recently changed, don’t pay more for freight shipping than you need to. By implementing logistics software, you can become your own logistics provider and cut the middleman out of the logistics function.