Five Reasons to Implement a Logistics Software Solution

If you’re trying to execute the shipping process without the aid of logistics, chances are that a carrier company has you where it wants you: with no formal knowledge of logistics and therefore at the mercy of whatever shipping solutions it suggests. Like shipping companies, carrier companies are in business to make big money, and the more money that they can make you pay, the better. Unfortunately, hiring the logistical knowledge necessary to take the mystery out of the shipping process can be costly as well, unless you decide to implement a logistics software solution, which automates most aspects of the shipping selection process to insure that you’re presented with the best options for your situation. Ultimately, a logistics software solution allows you to become your own logistics provider, which has six major benefits compared to other logistics options.

More Comprehensive than Cheaper 3PL Solutions

If you’re considering third party logistics (3PL), you’ve probably encountered some attractive service rates. But you have to be careful about who’s offering them. In most cases, cheap 3PL rates are offered by standard 3PL providers and service developers, both of which focus on specialized solutions and not a comprehensive, innovative approach to the shipping process.

More Affordable than Comprehensive 3PL Solutions

There are 3PL solutions that offer a comprehensive, innovative approach to the shipping process, and are offered by 3PL providers that are known as customer developers. Like customer adapters, customer developers handle your logistics process. However, unlike customer adapters, they also develop innovative solutions. Unfortunately, a customer developer’s highest level of service is almost always unaffordable to small and midsized companies.

More Affordable than Hiring Your Own Logistics Experts

Almost every shipper would like to have its own shipping fleet overseen by its own team of logistics experts. But hiring those experts-not to mention buying the shipping fleet that appropriates their presence-is a significant investment to say the least. Until your company gets bigger, implementing a logistics software solution makes the most financial sense.

Puts You in Control of the Shipping Process

It’s understandable that a company would rather have someone else handle their logistics function. Yet, the number one complaint of 3PL customers is that they feel distanced from their logistics provider. When you implement a logistics software solution, the software does the work of a logistics expert, allowing you to choose from among recommended shipping options and putting you in full control of your shipping process.

Presents You With a Greater Range of Shipping Options

When you contract with an asset-based 3PL provider, the shipping options that you receive are also based on how they sync with the provider’s interests, and the same is true of when you contract with a non asset-based 3PL provider, in which case the provider typically offers shipping options that result from striking a deal with certain carriers. When you implement a logistics software solution, you cut the middleman out of the logistics function and realize an uninhibited range of shipping options.

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.

Calling It Quits: Is Abandoning Legacy Systems for Ready-Made Shipping Software All Worth It?

One of the tougher decisions every shipping executive has to make has to do with replacing an outdated technology with more efficient shipping software. As it turns out, replacing an ageing IT platform is a lot more complicated than it sounds, particularly in such a fast-paced business environment as liner shipping. History has been a witness to countless cases where poor implementation of new technology has resulted in more harm than its supposed benefits.

Yet, despite this fact, more and more shipping operators, NVOCC’s, and logistics solution providers choose to make the difficult, and yet rewarding, decision of switching to more advanced liner shipping software for all the right reasons. Regardless of their desired outcomes, these shipping companies abandon their ageing legacy systems, not because doing so is the better alternative available, but because it is the only option that is left in order for them to remain competitive.

Around two or three decades ago, many large shipping companies chose to build bespoke IT platforms to automate their internal logistics processes. This was, without a doubt, a good decision back then because it helped operators to streamline their operations and make best use of their in-house resources. Transporting goods in containers became a lot easier and profitable using IT platforms specifically built for container shipping, such as container management software. Eventually, operational costs were significantly reduced, efficiency increased, and shipping companies gained competitive advantage over competitors who could not afford such investment.

However, the problem with using bespoke IT systems was that they generally required a huge capital of up to 50 times the cost of off-the-shelf shipping software in some cases. Aside from the hefty initial investment, maintaining those custom-built IT platforms was also very expensive. First of all, building a bespoke system required hiring a skilled in-house software programmer, and in most cases, a team of additional in-house IT staff to maintain and keep it running. And since those systems were mostly custom-tailored to exact specifications, technological developments quickly made them age in just a few years. Since software used (and still tend) to run in five-to-ten-year cycles, operators could only hope that they could, at least, make back the cost of their investment before their platform became obsolete.

To address these problems and make business more profitable, shipping software companies have developed ready-made solutions which can be purchased off-the-shelf. These types of shipping software are not only cheaper to implement than traditional bespoke systems, but are also proven to be a lot easier and less-expensive to maintain. To ensure wide-range and protracted usability, packaged software solutions incorporate a “switching” mechanism which allows each application to be customized to suit individual user or function, and other company peculiarities. This mechanism also allows operators to upgrade their existing IT platform to newer versions without the need for complicated and expensive re-programming.

Aside from a streamlined business process, shipping line software solutions are also instrumental in improving customer service and value. Unlike before, customers nowadays are more informed, and accordingly, more demanding. They want to be able to keep track of their shipments and have some degree of control over the shipping process. Container tracking software is designed to provide customers and vessel operators a complete and up-to-the-minute visibility over cargo movements. This not only enhances customer experience through value-added services, it also improves the shipping company’s reliability, which opens the door to more clients in the future.

Lastly, enterprise shipping software enables operators to reduce costs on fuel and other operational expenses. Fuel cost has always been a matter of great importance in shipping, and it truly deserves every liner vessel operator’s attention considering the fact that bunker accounts for more than half of a ship’s operating expenses. To reduce fuel consumption, shipping companies are implementing cost-saving measures such as finding more direct routes, installing more efficient propellers, and creating more hydrodynamic vessel designs. On top of these, many liner vessels now use bunker management software to monitor and manage their bunker expenses more efficiently.

Technology evolves very quickly, and shipping companies must evolve with it if they must continue to survive. By switching to modern platforms based on enterprise shipping software, liner vessel operators gain greater competitive advantage than what bespoke IT systems can provide.