Today’s Options in Technology To Improve Your Transportation Program – KDL
Q: What have been the technology changes in transportation?
A: As we have seen in other industries like Netflix with entertainment content or Airbnb with hospitality, we are also seeing innovative technology, i.e. Uber Freight, trying to disrupt the transportation industry. All of these technology advancements benefit everyone that is in our industry.
For a shipper, it provides boundless visibility through a single click of their mouse. To a third-party logistics (3PL) provider or carrier, it provides the ability to offer dynamic pricing or rates to shippers based on carriers’ current supply and demand. The days of EDI connectivity are quickly becoming outdated and replaced with real-time data feeds that benefit both shippers and their shipping partners.
Q: Why does TMS software vary so significantly in cost?
A: There are many TMS packages that are one-dimensional. They are usually strong in one of the core modes—truckload, less-than-truckload (LTL), or small package. If you are a small, basic shipper, these types of software may suit your needs. If you are a growing shipper with a complex supply chain, you most likely would desire a TMS that is multi-modal and has the ability to think on your behalf with planning, optimization, and data algorithms that directs you on how to move your shipments.
The decision is with the shipper on how much they are willing to invest to enhance their logistics efficiency. The more you invest, the greater the return on your investment.
Q: What are the primary differences between working with a software provider vs. working with a technically advanced 3PL?
A: Working with a software provider will give you a fraction of the advantages and benefits that a 3PL can provide you. An enhanced system from a software-only provider may be enough for simplistic shippers to achieve the type of productivity they are looking for. However, working with a software-only provider, they will never be able to support you with carrier management and price negotiations, freight audit processing or logistics management duties such as inbound and outbound routing control, freight consolidation, mode optimization, etc.
Some software-only providers and 3PLs can also offer technology integration directly into the shipper’s Enterprise Resource Planning (ERP) program or their main operating system. Instead of jumping back and forth between a shippers’ ERP and then a TMS to quote and move a shipment, everything can be done within the shippers’ ERP program. The decision for the shipper is whether they want to license or integrate with a technology provider or partner with an advanced 3PL.