TL Transportation Software – Is Management Based Third Party Logistics a Good Fit?

November 2, 2020


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In the debate between whether it’s better to use TL transportation software-also known as full truckload logistics software and truckload logistics software-or third party logistics to arrive at the best TL shipping solutions, cost effectiveness and range of shipping options are the two most mentioned factors in favor of TL transportation software. And it’s true: because management based third party logistics providers charge their clients more than shipping arrangements actually cost in or to earn their profits and only work with shipping carriers that provide the best rate discounts to make those profits possible, logistics software is an easy to use money saver that presents companies with an increased rage of shipping options. But as if this weren’t enough, there are some other critical reasons why you should choose truckload logistics software over third party logistics. 3pl logistics

Range of Services

Because every company’s ideal TL shipping solutions are different, you have to make sure that a third party logistics provider offers the range of services that you need; and considering that a company’s shipping needs can significantly change as it grows or decides to produce new products, it’s difficult to predict that you won’t need certain services at some point in the future. In fact, you could even get stuck in the position of having to fulfill a contract when a provider can’t meet all of your needs. With logistics software, on the other hand, the software provider re-customizing your software options can easily tend to your new shipping needs.

Financial Soundness

In the past two years, a significant number of third party logistics providers have gone out of business or been consolidated. What this meant for their customers is exactly what it sounds like: they had to rush to form new contracts with another provider in order to keep their shipping process on track, and choosing a logistics solution in a rush is contrary to the nature of logistics. When a down turned economy starts affecting the trucking industry, carriers aren’t able to offer management based third party logistics providers the same level of discounts that they used to, which leads to providers raising their rates, losing customers and eventually being consolidated or folding. The financial health of logistics software isn’t based on the carrier industry, but on the freight transportation software business, which is currently booming.

Range of Control

Regardless of which type of third party logistics provider you contract with-asset based, management based or an integrated provider-you’re entering a situation where another company will control your transportation logistics. The value controlling your company’s operations should be based on what you lose as a result of not controlling them and not on the mediocre notion that being “in control” is automatically better than letting another company help you with its expertise. But the one thing that you always loose by opting for third party logistics is the ability to continually optimize your shipping process and realize increased cost savings and, in many cases, improved delivery time. When companies switch to logistics software, research shows that they can reduce their overall shipping costs by 10 percent at the end of one year.

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