Why Choose Outsourced Over In-House Shipping Software Solution

Over the past two decades, automation of business processes has significantly increased in many industries including aviation, telecommunications, and banking. In shipping, automation has improved business efficiency by simplifying critical operations that require time and expertise. Nowadays, with increasing access to modern technology, it’s not unusual to find a small carrier using cheap off-the-shelf shipping software solutions to streamline and manage its core operations more efficiently. However, there are still quite a number of carriers who prefer bespoke IT systems despite the availability of much cheaper packaged solutions.

There are certain factors that motivate shipping business operators to develop their own IT systems in-house instead of buying cheaper off-the-shelf solutions. One of these is the advantage of having full control of the development processes which allows users to make specific improvements to the original platform as necessary. In addition, In-house platforms have been tailored to exact specifications, which is believed to deliver competitive advantage.

However, while bespoke systems offer full control of operation-specific features, they also require skilled IT staff and programmers to implement necessary upgrades. The fact that technology is rapidly changing means that IT platforms date and become unsupportable after a while. If a shipping business cannot keep up with the pace of change, it will find itself stuck with an obsolete technology which cannot support newer IT platforms. In addition, investing in a customized platform to automate only a single segment of shipping operation (e.g. a single segment of a terminal), is not worth the cost of the investment, which is significantly higher than buying off-the-shelf shipping software which can be customized to carry out various functions.

The following are some of the most prominent benefits of using off-the-shelf or packaged shipping software:

1. Price. Buying packaged software is calculated to be 10 to 50 times cheaper compared to developing an in-house IT system.

2. Flexibility. Modern packaged shipping software incorporate built-in switching options which allows operators to customize application to perform various tasks without doing any expensive reprogramming.

3. Upgrade options – Packaged software provides upgrade solutions to keep pace with fast changes in technology to make sure that users are always working from tried and tested, up-to-date, and well-supported platforms.

4. Guarantee. Customized or in-house systems do not offer test-runs prior to installation, and the end-product is not revealed until it has been delivered. Off-the-shelf solution allows you to use a system for a certain period to see if it delivers what you expect before you actually buy and install it into your existing IT infrastructure.

5. Efficiency. Packaged solutions are more cost-effective, require less resources, and deliver long-term solutions that can be customized to handle specific requirements of a shipping business.

While off-the-shelf shipping software offer a lot more benefits both in cost of investment and scope of features, accessibility to technology has significantly increased the number of software developers in the marketplace, many of which are not reputable. Carriers should be careful in choosing a supplier by checking their capability, reliability, and financial stability. After all, it’s not wise to buy from a company who’s not going to be around after two or three years, leaving you without support in a case of system failure.

Logistics Software Solutions Can Benefit Your Company in Three Basic Ways

When companies present their transportation logistics solutions, they have tendency to either engage in corporate speak and not really say much about their solutions or speak with such expertise that they fail to give you a basic understanding of how logistics solutions can benefit your company in a daily way. For small to midsized companies, transportation logistics typically arrives in one of two forms: by a company outsourcing its logistics to a third party logistics (3PL) provider or by implementing logistics software solutions that are available as an online software application.

Given that logistics software offers an easy to use interface can be customized to a company’s particular shipping needs and costs far less than outsourcing to 3PL providers, it’s usually the logistics option of preference for small to midsized companies that don’t have the luxury of a shipping fleet or a large shipping budget. If you’ve heard of logistics software but are looking for a basic understanding of how it can aid your shipping process, we offer the following overview of how logistics-software solutions help companies in terms of freight optimization, shipping route optimization and shipping method integration.

Freight Optimization

For small to midsized companies that regularly ship less than a full freight load of products, freight optimization typically subsists on finding the best less than truckload (LTL) shipping options. LTL shipping is when a shipping carrier lets companies ship partial loads that combine to compose a full truckload. The cost value of LTL shipping comes from shippers splitting the cost of a full freight load. Although less than truck load shipping offers low shipping rates, due to numerous stops for delivery and pick up, it often takes goods longer to reach their destination than in other shipping arrangements. Nevertheless, logistics-software solutions can be used to find less than truckload carrier routes that offer the best delivery time. Because warehouse stops are a common feature of freight shipping, logistics software also offers warehouse optimization capabilities.

Shipping Route Optimization

If you use a 3PL provider, you probably won’t have any idea what shipping routes your carriers are using. But shipping routes are a major factor in determining overall shipping cost. Logistics-software can analyze shipping routes according to multiple criteria, including: length of route, traffic patterns, road quality and construction patterns. One example of how route optimization can decrease shipping cost and improve delivery time is by analyzing routes in terms of travel time. For example, a route that is shortest in distance may be longer than another route in terms of travel time due to traffic patterns.

Shipping Method Integration

Shipping method integration is an unofficial term that refers to the ability of logistics software to suggest integrated shipping methods for the sake of reducing shipping cost and improving delivery time. For example, even though air shipping is traditionally more expensive than ground shipping, logistics software might suggest shipping certain shipments by air due to expensive, unavoidable warehouse fees that would result from ground shipping. In addition, logistics software may make such suggestions as shipping products halfway to their destination by boat and the other half by freight truck.

Introduction of Shipping Software and SaaS

Introduction

Shipping software solutions automate the process for manufacturers or fulfillment organizations from packaging, shipment processing, tracking and tracing to invoice editing. The system delivers shipping and logistics processing, export compliance, and customer service functionality in one integrated application, all from the convenience of a desktop PC. Shipping software solutions on web portals, can be accessed any time from any location by the customers to track their orders. The solutions also provide secured layers of technologies for web host servers to communicate over the Internet.

In today’s economic climate where organizations watch every penny, staying up-to-date on the latest requirements and regulations and freedom of choosing carriers, is the need of time. Using the shipping solution, allows real-time access to major carriers such as FedEx, UPS, USPS, and DHL. It also provides rate-shopping, freight pickups, appropriate labels and documentation generation, and also real-time status of shipments that helps to track shipments not delivered on time.

The shipping software solutions provided can collect and store activity information and make data available through reports as per the customers’ requirement. Due to these solutions organizations realize and achieve value from their technology investments and manage the forever changing challenges in a volatile market.

Integration and Monetary Gains

Organizations can maximize savings by integrating the solutions into their business practices, where all cost-analysis and rate-shopping is done automatically, leaving more time and money at their disposal. Integration can be done with systems such as Oracle E-Business Suite, Sage ERP X3, PeopleSoft, Microsoft Dynamics, SAP R/3, JD Edwards EnterpriseOne, JD Edwards World, and others. Time is saved due to the automated order processing with minimal data entry and eliminates re-keying of data during the delivery of the product/order to the customer (fulfillment process).

Cost-effective Software as a Service (SaaS)

The entire software industry is moving towards service-based products (SaaS) rather than one-time purchases and major investment in technology. One of the biggest advantage to an organization is the ability to reduce IT support costs by outsourcing hardware and software maintenance and support to the SaaS provider. Market trends point towards improving business-to-business connectivity that helps organizations in streamlining communications with their customers. Many shipping system vendors have started to offer the option to deploy applications at their customer (manufacturers or fulfillment organizations) site or host the software system through the vendor’s own server.

New Solutions Meet Target

It is critical an organization understands where improvements can be made throughout their process and get the right tools to effect these changes. Organizations who understand the importance of investing in technology and more efficient processes have their eye on the required goal – a return on investments by meeting all the customer requirements.