Logistics Management: Which Option Is the Most Effective?

In shipping, logistics management refers to the management of the shipping process in three respects: transportation planning, transportation monitoring, and the measurement of Key Performance Indicators (KPIs). These disciplines form what is known as a Transportation Management System (TMS), which manages the shipping process from the planning phase to the quality assessment phase. With the exception of certain administrative functions of transportation monitoring, logistics informs each aspect of a TMS. But the best logistical resource for shipping management can be a matter of debate.

The Emergence of 3PL

In recent years, Third Party Logistics (3PL) has become a viable alternative for companies that don’t have – and often can’t afford – an in-house logistics department. Also known as freight brokers, 3PL providers offer different levels of logistics, from basic shipping services to comprehensive, innovative shipping management. For companies that need a singular shipping service (e.g. cross docking) instead of a comprehensive logistical approach, 3PL can be an economical alternative to creating a logistics department. But for companies that need the highest level of logistics (comprehensive, innovative shipping management), contracting with a 3PL provider and maintaining an in-house logistics department can be similarly expensive.

But there is an affordable alternative to creating an in-house department or using a high-level 3PL provider: logistics software, also known as TMS software. Featuring a user-friendly interface that allows non-experts to plan, monitor, and assess the value of shipping arrangements, TMS software occupies a unique niche in the shipping logistics industry, one that allows shippers to supply their own logistics without hiring in-house experts.

If your company is considering alternatives to entering another 3PL contract, the software’s benefits could provide exactly what you need.

The Benefits of TMS Software

For most shippers, TMS software has three primary benefits when compared to operating an in-house logistics department or contracting with a 3PL provider:

Low overall cost
Truly unlimited shipping options
Direct control of the shipping process

An in-house department can offer unlimited shipping options and control of the shipping process, but it doesn’t offer these benefits on a budget that is affordable for small and midsized companies. 3PL can offer an economical logistics function, but it doesn’t offer control of the shipping process. When a shipper wants the benefits listed above in a single solution, TMS software is the most effective option.

Conclusion

TMS software can be implemented on an in house model or on a Software as a Service (SaaS) model. Because it eliminates hardware costs, system maintenance fees, and system upgrade costs; the latter model offers the most economy and the least aggravation, making it the most popular option.

If your company doesn’t have the budget to support a logistics department, and it doesn’t wish to delegate its shipping process to a 3PL provider, TMS software could be the answer. To learn more about how TMS software could improve your company’s TMS while lowering its operating cost, consult with a provider of shipping logistics software today.