Transportation Software Versus Freight Brokerage

For many businesses, the high cost of transportation leads to the pursuit of better shipping options. For businesses that do not staff shipping experts, these options are pursued with logistics software, or through freight brokers, both of which use logistics to identify the best carriers based on three criteria: delivery time, freight care, and shipping rates.

Which option is better: logistics software or freight brokerage?

Ultimately, it depends what you require from the logistics function in terms of shipping management and cost. Today, small and medium size shippers are increasingly opting for logistics software. Below are some reasons why.

Simple and Economical

At a time when Software as a Service (SaaS) applications provide solutions for everything from data storage to product design, the concept of shipping logistics being facilitated by a SaaS program seems normal. As a solution that can replace freight brokerage and serve as a substitute for shipping experts, logistics software is designed for usability, as witnessed by its user-friendly interface that lets you select the shipping arrangements you need based on the options the software generates.

Financially, transportation software benefits shippers in two ways: it eliminates the need to pay in-house experts or freight brokers, and it increases carrier options.

Although shippers decide which carrier options to accept through a freight broker, they seldom control how the options are selected. For example, a broker might select Truckload (TL) and Less than Truck Load (LTL) options from an electronic posting system, where available loads are matched with available carriers, even though the system offers a limited range of LTL rates.

By choosing from the limited options supplied by the broker, the shipper misses the opportunity to save money by selecting from a broad range of options. As many shippers discover after using a freight broker, being in control of the shipping process and receiving the best shipping options usually go hand in hand. Logistics software puts shippers in control of the shipping process.

When is Freight Brokerage Beneficial?

Just as some companies prefer to control the shipping process, other companies prefer to outsource it. Often, these companies hire a freight broker to manage the logistics function from start to finish. In such cases, logistics software does not offer what the shipper wants. If your business needs a third party to manage the logistics function from start to finish, freight brokerage is the best option. If it needs increased shipping options, less capital invested in logistics, and more control over shipping, it could benefit from using logistics software instead.

Available on a SaaS model or an in-house model, the software is ideal for small and midsize businesses that do not have a logistics department that manages a transportation fleet. In addition to meeting their logistical needs, the software helps businesses reduce the cost of the logistics function by eliminating the need for freight brokers.

To learn more about transportation software and how it can help your business find the best TL and LTL rates, contact a provider of SaaS logistical solutions today.