For companies that need improved shipping solutions, the options of choice are two: hire a logistic expert, or implement logistics software. In most cases, the option of hiring a logistic expert Logistics consists of hiring either an in house logistics professional or outsourcing the logistics function to a third party logistics (3PL) provider, each of which represents a significant financial commitment; an experienced logistic expert earns roughly $90,000 annually, and contracting with a 3PL provider that offers a similar approach could cost as much or more. As a result, some companies turn to 3PL providers that cost less but offer a lower level of service, but with poor results concerning shipping options.
Among 3PL providers, customer developers and customer adapters offer a comprehensive approach to the shipping process, while standard 3PL providers and service developers offer particular solutions but not a comprehensive approach. When a company needs only a specific shipping solution, hiring a standard 3PL provider or customer adapter can make sense. But for companies that have a complex shipping process or whose growth predicts a more complex process, hiring the above 3PL’s makes little sense. Instead of spreading out shipping solutions among multiple companies, an integrated shipping process should be the goal.
The notion of “integrated shipping” is a value touted by customer developers, customer adapters, and logistic software providers alike. But why is it so valuable? As a simple demonstration, consider the following scenario: A shipping company that has a contract with either an asset based or non-asset based 3PL provider that deals in road transportation alone needs to ship a semi trailer of products from California to New York, which will cost $8,000. However, if the carrier would ship the load halfway to its destination by truck and the rest of the way by plane, the cost of shipping would be $5,000.
In most cases, 3PLs aren’t willing to offer such solutions for one of two reasons: they lack their own carrier assets and only partner with carriers that offer the best financial incentives, or they own their own assets but don’t own the diversity of assets (i.e. road, rail, sea, and air vessels) to offer truly integrated shipping solutions. With the implementation of logistic software these concerns disappear. As the software’s providers are quick to point out, logistic software performs the work of a logistic expert and allows companies to choose from ranked shipping solutions using a user-friendly interface, which has a double edged cost saving effect: it allows companies to cut the middle man out of the logistics process, and it allows them to realize integrated shipping solutions that best meet their needs.