The difference of hiring a logistics provider versus implementing logistic software

Transporting a product is inevitable in a manufacturing business and to satisfy your customers, delivering items on time and with care is vital. With this considerations in mind, hiring a third party logistics or implementing logistic software offering Home Delivery service to your customers will be the two things you would definitely consider.

Implementing Logistics Software

While most manufacturing companies foresee bulk orders, many of them opt to implement their own logistic software to save on logistics or shipping cost and at the same time reduce operating cost. Logistics or transportation software is designed specifically to integrate shipping solution tailored to meet a company’s needs. If your company is still small or at a starting stage, logistic software will help you improve your delivery time by using the software in analyzing various factors like road construction, highway traffic patterns and the like. However, if your company is large enough and shipping process complicated by various factors like multiple assembly location or warehouse needs, you can benefit the software as it combine your complicated shipping process into a single solution allowing you to save on time and money.

Hiring a logistics provider

On the other hand, many of the big companies chose to hire a third party logistics provider to do the Home Delivery of goods on their behalf. Although studies have shown that companies can save by ten percent on shipping cost after a year of hiring a third party logistics provider or using logistics software, hiring a logistics provider is still proven more expensive. What logistics experts can do or offer to companies are also achievable in implementing logistics software. Logistics providers are of no doubt can act as the company’s transportation brokers, has the ability to determine the fastest way to get products to retailers or consumers, and more, all these are also possible when implementing logistics software. However, hiring a logistics provider is more convenient on the company side, for someone is already doing the job for them.

What is a third party logistics?

The third party logistics is the company providing logistics services to various companies. For example, if you need a logistic company to deliver your goods to your customers, the company you are hiring is the third party logistics.

Third party logistics provides various services to companies including supply chain management, warehousing, consolidation service, and order fulfillment.

Few of the many reasons why a company should hire third party logistics include:

Flexibility and scalability – since setting up a logistic division using one’s own logistic software requires some fixed cost, third party logistics allow company to start small while keeping up the logistic needs.

Efficiency and Specialization – third party logistics allow companies to focus on their specialty like selling their items.

Technology – since logistics is the main business of third party logistics, a high performing third party logistics will definitely keeps on updating with the latest update on logistics including hardware, software and equipments, which will on the other hand keep a company updated too in terms of logistics.

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