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Software Logistics – How Does It Compare to Other Logistic Solutions?

September 17th, 2011

If your company ships freight, it can identify shipping arrangements through the following logistics solutions: second party logistics (2PL), third party logistics (3PL), fourth party logistics (4PL), and logistics software, which provides shippers with their own logistics function. Below, we examine how it compares to contracting with a 2PL, 3PL, or 4PL logistics provider.

2PL
2PL providers are carrier companies that contract directly with shippers. For shippers, the advantage of 2PL is the elimination of brokerage fees charged by 3PL providers. The disadvantage is shipping options are limited to that particular carrier’s options. In certain instances, this could result in significantly overpaying for shipping.

For example, if a carrier offers Less than Truckload (LTL) shipping, but doesn’t integrate ground shipping with other mediums (i.e. air, rail, and sea), its customers will not save money through integrated shipping options. Due to the innumerable shipping options it presents, logistics software eliminates this issue.

3PL
Also known as freight brokers, 3PL providers operate in two capacities: freight brokers that also have their own fleet (asset-based 3PL), and pure freight brokers that act as middlemen in the shipping process, connecting shippers with various types of carriers (i.e. ground, rail, air and sea), often in an integrated fashion.

3PL companies range from standard 3PL providers, which offer basic services but not comprehensive solutions, to customer developers, which manage a company’s shipping process and propose new solutions. In the first case, the advantage is cost, and the disadvantage is limited service opportunities. In the second case, the advantage is expanded service opportunities, and the disadvantage is cost.

Unless you need singular shipping services, or can afford to pay an entity as you would a team of in house experts, 3PL is rarely the best option.

4PL
4PL providers serve in an advisory capacity. Their services are consultative, not equipment or brokerage based. If your company has its own shipping fleet and logistics department, hiring a 4PL to fine tune its shipping process could pay dividends. But for companies that don’t have a shipping fleet or logistic department, the cost of 4PL services versus what they could offer is a poor value proposition. » Read more: Software Logistics – How Does It Compare to Other Logistic Solutions?

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Posted in International Business

Tags: 4pl logistics process Software third party logistics

Understanding International Shipping

September 16th, 2011

International shipping very often takes place by ship. It might sound obvious but in places like the US where shipping can mean delivery be means such as air, road or railway then it is important to clarify this point right away. International shipping usually refers to the transportation of goods for the purpose of commerce; however in a number of situations the military or even recreational users get involved with international shipping.

The shipping of goods worldwide is a much specialised business and one that requires a keen attention to detail and a strong infrastructure. The port of Shanghai claims the award as being the busiest shipping port which is quite a feat considering millions of tones of cargo are moved around the world every single year. It has held the title since 2005 when it took over from the Port of Rotterdam in the Netherlands which was the busiest shipping port for over 40 years.

It isn’t just the ports that get busy however because since a ship spends most of its time at sea it is natural to assume that even though the world is 60% ocean that there are still traffic bottlenecks which occur in much the same way as we see on motorways. The Strait of Dover which is the narrowest part of the English Channel is the busiest shipping lane in the entire world which is surprising since most would expect somewhere in Asia to be the busiest. This is the case however as most shipping traffic prefers to sail around the south of England rather than attempting the treacherous seas that lie to the north of Scotland. Despite how busy it gets, many people still attempt the cross it in forms other than ship for example by swimming it (many have tried more unconventional methods such as using a bathtub!)

The most common kind of ship you will see at sea is a bulk cargo carrier; these are often carrying food stuffs in large quantities. Tankers and container ships are also very common and these often carry large containers that are filled with products people are moving around the world. For example electronics products from Asia or somebody moving home from the UK to the USA.

International shipping isn’t all about bulk or large-scale operations; however, as there are many specialist shippers that ensure clients with specific needs can move their items around the world whether this be fine art, antiques, furniture or something bespoke.