For those who have never owned a manufacturing company, the shipping process may appear to be as simple as selecting freight logistics to transport go
For those who have never owned a manufacturing company, the shipping process may appear to be as simple as selecting freight logistics to transport goods from one location to another. Those who have owned or are planning to own a manufacturing business, on the other hand, know that the shipping process can be anything but simple, especially when it comes to selecting a carrier that offers the best rates while delivering goods in the shortest amount of time. Finding the best freight logistics company management solution will be one of the first hurdles to your success if you plan to open a manufacturing business.
For managing and executing the shipping process, there are numerous freight management solutions available. In this section, we will look at the four most common freight logistics management solutions and how they apply to small to midsize manufacturing businesses.
Putting Together a Freight Logistics Team
To properly address your transportation logistics, you’ll need to apply logistics expertise to the shipping process; and for many businesses, the solution is to hire a team of in-house logistics professionals. The first consideration in deciding whether or not to hire full-time logistics experts is always payroll expense. Although large companies with their shipping fleets frequently employ a team of logistics experts, the salaries that these experts command can be prohibitively expensive for smaller businesses. If you find yourself having to sacrifice other aspects of your operation to hire logistics professionals, it’s probably best to look for an alternative and wait until your company grows large enough to afford increased payroll.
Using a Third-Party Logistics (3PL) Service Provider
Outsourcing transportation logistics to a third-party logistics (3PL) provider is a common practice among both small and large businesses. When you use 3PL, you have logistics experts at a remote location rather than in-house. Standard 3PL providers, service developers, customer adapters, and customer developers are the four types of 3PL providers. Standard 3PL providers and service developers focus on specific shipping services rather than comprehensive shipping solutions. Similarly, customer adapters have a more managerial role than traditional 3PL providers and service developers, but they do not specialize in innovative shipping solutions. Customer developers are experts in developing innovative shipping solutions. However, the level of service you receive comes at a cost equivalent to hiring your own logistics expert.
Putting Logistics Software in Place
Logistics, also known as truckload transportation management software, enables businesses to become their own logistics provider by gaining access to an easy-to-use interface that allows them to select the best shipping options for their company’s needs. Logistics software is available as a SaaS solution as well as an internal software solution. In both cases, the software is tailored to a company’s specific shipping requirements based on careful logistical analysis. Logistics software does not necessitate logistics, and it is less expensive than outsourcing to a 3PL because it is priced as a software service rather than a consulting service.
Logistics software is ideal for small businesses because it eliminates costs associated with traditional shipping, such as TMS software costs, annual software maintenance costs, 3PL costs, gain shares, freight margins, and common rate base licensing costs. According to research, companies can cut their annual shipping costs by 10% after implementing logistics software for the first year.
When companies present their transportation logistics solutions, they either use corporate-speak and don’t say much about their solutions, or they speak with such expertise that you don’t get a basic understanding of how logistics solutions can benefit your company daily. For small to medium-sized businesses, transportation logistics typically takes one of two forms: a company outsourcing its logistics to a third-party logistics provider.