For most companies, the "middleman" that logistics software replaces is a 3PL (third party logistics) provider, who handles a company's shipping needs according to the type of 3PL it practices.
Currently, there are four types of 3PL providers: standard 3PL providers, who offer basic 3PL services but don't practice 3PL as a core function; service developers, who offer more specific services than standard 3PL providers; customer adapters, who manage a company's existing shipping process; and customer developers, who manage a company's shipping process and propose innovative shipping solutions.
As one might expect, hiring a customer developer would be the optimal 3PL option for achieving the best truckload shipping solutions in terms of shipping integration.
But hiring a customer developer can be as costly as hiring an in house logistics expert.
As a result, small to midsized companies typically choose between hiring standard 3PL providers or service developers and implementing TL logistics management software.
The validity of hiring a standard 3PL provider or a service developer depends mostly on a company's range of shipping needs.
For example, if a company needs a singular solution for TL shipping, then hiring one the 3PL providers above can make sense.
But if a company has more than one shipping need-and most companies do-implementing logistics software makes the most sense in terms of cost and integrated shipping solutions.
Prior to the release of logistics software, smaller shippers often spread their shipping solutions among two or more 3PL providers, which ensured that the solutions would never be integrated, combining road, rail, air or sea shipping into a fluid process that improved delivery time and reduce cost of delivery.
Today, however, logistics software allows smaller companies to realize such options.
When choosing between 3PL and logistics software, it's important to realize that logistics software doesn't require logistics expertise of its users.
Instead, the software does the work of a logistics expert, allowing users to choose from among recommended shipping options by accessing a user-friendly interface that features data fields that acquaint with a company's unique shipping needs.
If your company currently uses 3PL and would like to improve its shipping process, contacting an experienced logistics software provider is the first step toward markedly reducing shipping costs.
According to recent studies, shippers that implement logistics software realize a 10 percent reduction in shipping costs in the first year alone.