When a person thinks of opening or buying a product manufacturing business, shipping logistics usually isn’t their first concern. More often than not, how to transform the business into a more profitable operation is the first concern, and understandably so. But soon, the reality that a manufacturing business can only succeed to the extent that it succeeds as a shipping business becomes clear, leading to one of three decisions: if none are on staff, the hiring of one or more logistics experts; if one is not already retained, the hiring of a third party logistics (3PL) provider; or the implementation of whatever type of logistics software applies to the company’s shipping situation (e.g. full truckload logistics software as a TL shipping solution or less than truckload logistics software as an LTL shipping solution). But before a decision is made, careful consideration of how each option affects the shipping process and company finances should be taken. outbound logistics
For most companies, having in house logistics experts is the preferred way to execute the logistics function. In addition to the feeling of security that comes with having an expert on hand, the primary complaint of 3PL customers is that they feel cut off from their shipping process due lack of communication with the provider. In house experts take care of this problem. But they do so at a price, which is roughly $70,000-$90,000 in annual salary, or roughly the same amount that you could expect to pay for a 3PL provider to manage your shipping process while proposing innovative solutions. Therefore, if you own a smaller business or your company needs to minimize its budget, hiring an expert might not be the best solution.
Contracting With a 3PL Provider
If you wish to avoid the cost of hiring one or more experts, then chances are you’ll want to avoid the cost of contracting with customer developers and customer adapters, which manage the entire shipping process. This leaves option of contacting with standard 3PL providers, service developers, or perhaps both, as each specializes in offering particular shipping solutions instead of comprehensive solutions. But, while it’s technically possible to outsource logistics on a need by need basis, doing so rarely results in a meaningful range of options, as standard 3PL providers rarely practice 3PL as their main function and service developers typically funnel their business toward certain carriers from whom they receive a preferred (discounted) rate and then charge customers above and beyond the rate.
Implementing Logistics Software
Compared to the options above, logistics software is remarkably inexpensive. Allowing companies to cut the middleman out of the logistic function, the software essentially functions as a logistic expert, presenting companies with an unlimited range of ranked shipping options that can be evaluated and selected through a user-friendly interface. Available on either a modifiable SaaS model or as an internal software solution, the software can be tailored to a company’s changing needs, and is ideal for both smaller companies with small budgets and larger companies that need to cut costs.