Logistics software companies provide tools to assist third-party logistics (3PL) providers; freight forwarders; air-, land- and sea-based cargo companies; exporters; importers and all related supply chain management (SCM) operations in reducing errors and improving efficiency in the SCM process.
But with so many different products out there serving every niche from dispatch and delivery to full-enterprise logistics suites, selecting the right logistics system can present a challenge.
We created this guide in order to support you when selecting a logistics system that will work for your company.
Here’s what we’ll cover:
Logistic software is designed to provide logistics providers the necessary tools to support them in the execution and management of their product delivery business. There are basically two sides to this kind of software:
Supply chain management. These are the features that manage the execution of the freight pick-up, tracking and delivery. SCM entails managing all the inventory and transportation details to get the product to its final destination.
Brokerage and bidding. Since most logistics operators serve third parties on a contract basis, freight brokerage software needs to manage the business aspect, too. Freight broker software can include bid and contract management, CRM, accounting and other essential business functions. Because some businesses focus solely on this freight brokerage aspect, there are also specific software solutions, often labeled freight broker or freight forwarder software, which cater directly to these types of operations.
|Inventory control||Manages purchase orders and supply levels, tracking the on-hand, allocated and ordered quantities along with historical and trend information for forecasting purposes. Supports order fulfillment, warehouse control and supplier sourcing.|
|Transportation management||Includes automated carrier selection (to determine the smartest carrier or shipping method for each delivery), shipment consolidation, route optimization, real-time tracking of cargo and dispatch scheduling.|
|Warehouse management||Usually includes barcode or RFID scanning, inventory transfer and smart storage tools to support the warehouse manager in storage location decisions and assistance with picking/packing.|
|Import/export support||Since many freight carriers deal with international cargo, most systems support you in managing currency exchanges, customs, taxes, multiple languages, trade regulations etc.|
|Track and Trace||Helps monitor items’ previous and current locations as it moves through the supply chain. “Tracking” refers to items’ current locations, while “tracing” refers to items’ previous locations. Track and trace software relies on barcoding, GPS and radio frequency identification devices to collect this information.|
|Risk management||Helps make the best out of bad situations by simplifying accident processing, insurance claims, lost freight or other incidents. Can also be used to identify potential areas to mitigate risk—for example, analyzing driver history or hazmat practices.|
|Integrated accounting||Handles quotes, expenses, billing, invoicing, receivables and even currency transactions to ensure seamless information transfer between the management of freight and payment.|
|Customer relationship management||Supports sales and marketing practices, as well as help desk and customer satisfaction.|
In our experience, most companies looking for transportation and logistics solutions fall into one of the following categories:
Domestic transport and courier. Smaller businesses dealing primarily with local or domestic goods are generally looking for smaller, simpler systems. Aside from the obvious elimination of the international shipping feature, the warehousing functionality tends to be scaled back as well, designed for ease of use rather than comprehensiveness.
Specialist. This applies to any business that focuses on one particular niche of the SCM industry. For example a shipping company will want detailed transportation functionality; a warehouse will want warehouse and inventory control; a distribution center will want dispatch and delivery. These companies will value best-of-breed solutions that have excellent functionality in their target niche more than they will broad integration across multiple categories.
Freight forwarder. Companies that manage the warehousing and delivery of freight need stronger warehouse and inventory features. For these buyers, our freight forwarding software guide gives more helpful information.
Third-party logistics provider. Since 3PL companies generally serve lots of customers from a wide variety of locations, they’ll need very robust CRM and accounting and excellent inventory control. They’ll likely want freight software geared specifically to the 3PL market like 3PLink and Accellos.
Private fleet manager. This represents the logistics arm of a larger company, for which SCM is a major and self-run component. These buyers will likely need an ERP-focused solution that easily integrates with the rest of the company’s operations. Example vendors include SAP, Manhattan Associates and RedPrairie. Our fleet management guide offers a list of solutions to help manage data on transportation operations.