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Maintain Cost-Efficient Bunker Consumption Through Shipping Software

Carrier operators are recently shaken up by significant developments involving one of the world’s largest oil suppliers. The shock comes after Denmark-based oil supplier OW Bunker has filed for bankruptcy this year, citing up to $750 million in debt due to alleged fraud. Analysts say this will spark a domino effect as carrier managers are hard-pressed to find alternative suppliers and make up for exposed amounts. Increases in the market price of fuel are also feared. This spells only tough times ahead for many carrier operators, especially those without shipping management software.

It is essential in the maritime services sector to adopt cost-efficient ways to stay afloat in such a volatile industry. It is volatile in the sense that it experiences numerous events that challenge profitability, such as OW Bunker’s filing for bankruptcy. Such scenario has prompted an increase in the demand for effective marine software solutions.

However, companies that already have integrated shipping management software are well-prepared to meet such challenges and shipping software companies have already churned out a variety of cost-saving solutions that profess better management of bunker consumption regardless of various scenarios.
Prior to the development of integrated shipping software, carriers relied on structural modifications to render their vessels more fuel efficient. For instance, modified fins can be considered for better speed regulation. The downside to this is that modification costs a fortune and takes a long time to install. Modern shipping on the other hand relies on digitizing speed calculation and management through intelligent voyage calculation. The system automatically estimates and determines ideal vessel speeds. It makes complex calculations that can accurately identify fuel-efficient speeds without compromising on-time deliveries, in a sense leading to bunker savings.

Other factors such as weather conditions and technical failures also pose risks to effective fuel consumption. Operators are powerless with regards to these, which is why they need a shipping software system that mitigates the effects of such scenarios. An intelligent voyage calculation system can make precise estimates as to current position and voyage duration. It then recommends a wide-range of actions that the crew can undertake to keep fuel intake within ideal limits while minimizing, if not eliminating, delivery delays.

Marine software solutions also allow for effective fuel management. There are software options that feature accurate fuel usage estimates using sophisticated operations. The software determines the actual consumption needs of the vessel, singling out the “cappuccino effect” which usually happens when filling up the vessel’s engine. With sophisticated bunker management software, monitoring bunker activities can work like a breeze. Carriers can breathe a sigh of relief knowing that they are consuming bunker volumes actually needed for particular voyages. Imagine the savings it entails!

Commercial shipping management has come a long way. From making manual estimates on bunker consumption, carrier operators now use marine software solutions to face a variety of challenges to their revenue generation. Despite difficult times ahead for the bunker fuel market, carrier operators can continue making money through automated fuel management processes.

Signs That Your Company Needs One

For companies that don’t have in house logistics experts, the question of how to handle the logistics of the shipping process often leads to contracting with a third party logistics (3PL) provider, a solution that rarely leads to a broad range of shipping solutions yet still costs more than implementing logistics software-also known as freight management software-which functions as a logistics expert and allows companies to choose from among recommended shipping options using a user friendly interface. While logistics solutions besides freight management software aren’t inherently bad, they’re usually more expensive and less thorough. Below, we take a look at some signs that indicate that your company could benefit from switching to a logistics software solution.

Feeling Disconnected From a 3PL Provider

The biggest complaint of 3PL customers about doing business with 3PLs is that the line of communication between provider and customer seems anything but fluid. While not having a talking business relationship with your 3PL provider isn’t necessarily a sign that your shipping process could be better, it is a symptom of how 3PLs do business: remaining at their position atop the logistics function by withholding logistical information. If you’d really like to know what your 3PL provider isn’t saying about your true range of shipping options, a logistics software solution will provide the answer.

Contracts With More Than One 3PL Provider

If you have a limited budget or are trying to save money on shipping logistics, you may have two or more contracts with standard 3PL providers and/or service developers, which means that you don’t have an integrated approach to your shipping process. Although specialized service oriented 3PLs can match your needs with carriers, they don’t integrate carriers for improved delivery time and decreased shipping cost. With freight management software, you have the opportunity to integrate all shipping methods (road, rail, air and sea) to improve delivery time and reduce cost of delivery.

Broken Freight on Arrival

While its rare to never experience broken freight, some companies experience it more than they should because they ship with a carrier that isn’t designed to handle it. Part of freight optimization is ensuring that freight is properly stacked right and shipped with other types of freight (especially in LTL shipping) that won’t cause damage. If you experience broken freight on a regular basis, chances are that there’s a problem with your shipping process that can easily be optimized with freight management software.

Feeling No Control Over Your Shipping Process

Because the cost of shipping is one the biggest expenses that shipping companies incur, every shipper should have as much control over its shipping process as possible. When shippers contract with 3PL providers, they relinquish control of the shipping process, putting themselves in the position to be overcharged and uninformed. Freight management software allows companies to become their own logistics providers, regaining control of their shipping process and saving money at the same time.

How Does a Logistics Software Solution Compare to Third Party Logistics?

If you’re searching for new shipping solutions, you may have encountered the debate that asks: which is more beneficial to the shipping process: implementing a logistics software solution or outsourcing logistics to a third party logistics (3PL) provider? To answer this question, its helps to consider the three things that every company wants out of the shipping process: cost effectiveness, excellent delivery time, and safe delivery of freight. With these things in mind, we take a look at whether a logistics software solution or a 3PL solution offers the greatest value.

Cost Effectiveness

In terms of cost, you’ll always pay more to receive a comprehensive, innovative approach to the shipping process from a 3PL than you will to implement a logistics software solution, and the reason why is simple: when you hire a full scale 3PL provider (i.e. a customer adapter), you pay a company to do what logistics software does without employing anyone. In other words, the software allows you to become your own logistics provider. Although other types of 3PL providers can be hired for less than the cost of customer developers (i.e. standard 3PL providers, service developers, and customer developers), they don’t provide the same level of service, with standard 3PL providers and service developers only offering specific services, and customer developers handling the full shipping process without proposing new solutions.

Excellent Delivery Time

Excellent delivery time depends on route analysis and optimization, as well as the availability of integrated shipping solutions. In simple shipping situations, route analysis could consist of analyzing route time in relation to distance, road surface quality, traffic patterns, etc., while in complex shipping situations, such as global shipping or moving unfinished products from location to location during the manufacturing process, route analysis could consist of the strategies mentioned above along with developing integrated shipping arrangements that could combine road, air, sea, and rail shipping, or any combination thereof. Improved delivery time can be achieved with both logistics software and 3PL. But logistics software, due to its impartiality, will present a broader range of options.

Safe Delivery of Freight

The safe delivery of freight is achieved through freight optimization, particularly in terms of using the right stacking strategies and ensuring that like products are shipped together. The cost of broken freight is perhaps the least mentioned aspect of shipping cost, and preventing it from happening can be achieved with either 3PL (e.g. standard 3PL provider or service developer) or logistics software. However, unless a shipper is looking for freight optimization alone, using logistics software would be the better choice financially.

How Do They Compare to Third Party Logistics?

Third party logistics (3PL) is the most popular choice for freight logistics among small to midsized companies. In order to help companies that regularly make shipments that are too large to financially benefit from parcel shipping and too small to financially benefit from full truckload (FTL) shipping, companies turn to third party logistics providers to get them the best deals on less than truckload (LTL) shipping, integrated shipping methods and to reduce the delivery of products to retailers. To these ends, 3PL providers significantly reduce their clients’ shipping costs compared to what they would spend on shipping without the aid of freight logistics. But they obviously do so by charging their clients for freight logistics services.

So, what’s not to like about hiring a 3PL provider to reduce your company’s shipping costs and ensure that your goods are delivered in a timelier manner? After all, is there really such a thing as realizing freight transportation solutions without seeking the help of freight logistics experts? Yes and no. If freight logistics isn’t one of your company’s core competencies, you’ll certainly need to get logistics solutions from those that specialize in providing them. But you don’t have to turn to a 3PL provider and pay a middleman to provide you with shipping solutions when you can instead use online logistics software.

The difference between 3PL and logistics software solutions-also referred to as logistics management software-typically doesn’t lie in one having more logistics expertise than the other; rather, it has to do with how the logistics information is supplied, how much it costs and how much control companies have over their shipping process. Essentially, a third party logistics provider uses logistics management software to provide you with shipping solutions, whereas online logistics software lets you act as your own logistics provider for an affordable monthly fee. In no case will you find a 3PL provider that offers their services for the low price that you pay for logistics software solutions, nor will hiring a 3PL provider offer you as much control over your shipping options.

Having complete control over your shipping process has two main benefits: you can research the companies that you’re considering hiring and you never have to deal with a middleman’s business policies affecting the price or availability of certain shipping options. Aside of the financial and shipping management benefits offered by logistics management software, its greatest strength is its extreme ease of use. Although the term logistics software implies computer expertise, logistics software comes with an easy to use interface that neither requires expert computer knowledge or expertise in logistics, meaning that each of your company’s departments can be involved in its shipping process.

TL Shipping Software Versus Management Based Third Party Logistics – Which is Better?

Truckload logistics software is increasingly becoming the logistics solution of choice among small to midsize companies that don’t employ logistics professionals. In most cases, companies that don’t employ logistics experts or use logistics software turn to third party logistics providers to handle their truckload (TL) shipping solutions. Companies may choose third party logistics providers for a variety of reasons, but two factors that generally influence this decision are companies’ perception that they can’t handle their own logistics and the corollary perception that only companies that specialize in transportation logistics could yield the most optimal TL shipping solutions. Converse to these perceptions is the fact that many companies that lack core competency in logistics are now acting as their own TL logistics providers by using truckload logistics software. With an easy to use interface and customizable options that reflect a company’s particular shipping needs, TL shipping software offers companies an increased range of shipping options at a lower price than third party logistics.

Perhaps the greatest advantage of third party logistics is that allows companies to be free of the logistics process. However, the price that companies can pay for this negligible freedom can be costly. Management based third party logistics providers make their money by acting as middlemen between shipping companies and carrier companies, securing rate discounts from carriers and charging clients a significant amount above the actual shipping cost in order to make a profit. But in additional to simply costing more money than using logistics software, third party logistics poses another problem: because management based logistics providers only work with carriers that offer preferred discounts, they potentially exclude carriers that could offer their clients the best overall shipping solutions. When companies choose logistics software instead of renewing their contract with a third party logistics provider, they have the opportunity view a full rage of shipping options and choose those that benefit them and not a third party’s business interest.

When you consider the factors that go into determining the best TL shipping solutions, that management based third party logistics providers only consider carriers that offer a preferred discount is shocking. For example, freight optimization, shipping route optimization and the potential for integrated shipping methods are three bargain basement factors that significantly influence the overall cost and delivery viability of a TL shipping solution. Unlike third party logistics, TL shipping software examines these and other factors simultaneously, eventually identifying the best carrier in relation to each factor. Third party logistics is an expense that never goes away. Companies have no insight into their own logistics process and therefore remain trapped at the hands of profiteering logistics experts. But when companies switch to TL shipping software, they don’t just get rid of the cost that comes with paying a middleman; the increased range of shipping solutions that they experience allows them to drastically cut their shipping cost. Research shows that companies that implement logistics software can decrease their total shipping costs by 10 percent at the end of one year.

Features to Look For When Comparing Freight Shipping Software

There is a new solution coming about to reduce shipping overhead and help ensure that companies are getting the best shipping price every time they have a shipment. Although paying a little more for a package seems very minimal at the time. Continually doing so adds up and can make your yearly shipping costs seem pretty outrageous. Freight shipping software is a newer TL shipping solution that many companies are starting to use. Not all of these logistics management software solutions are created equal. Below are some things to look for that can help you make the best choice so the addition to your company’s arsenal of software and tools is worthwhile.

Many software companies that offer freight shipping software have setups that can actually cost you more money. They may require separate licenses and keys for each computer installation and charge additional fees for upgrades and other items. Look for a company that uses a relational database that can adapt to increased activity and be self sufficient. These types of databases do not slow down and continue to perform just as well as the first day they were implemented. How much the activity increases will make no difference. Companies that do not use these types of databases will not be able to offer the ability to have multiple fields per shipping order, may have trouble syncing the data between computers, and will result in slower processing time.

Many TL shipping solutions are set up where multiple instances of the software are necessary. This increases your licensing, implementation, and support costs. Look for logistics management software that does not require multiple instances of the software to be present. Company’s that use this type of application program interface will not have to charge separate licensing costs per setup, have lower implementation costs, and may offer support and updates at no additional cost. When multiple instances of software are needed, there is a high chance of two people editing the same record and the information becoming inaccurate. With software that runs from one direct location, a record will remain locked until the other person is finished and this will protect the integrity of your data.

Logistics management software should also be able to handle all your shipping needs. Some software solutions only deal with outbound shipping. This does nothing for your inbound shipping needs and these can be just as costly. Thoroughly compare software companies to see which ones offer solutions for both. Be sure that they deal with all types of carriers. Another consideration is international and domestic shipping. If your company does business internationally, you want the software to be able to compare and handle international shipping rates as well. Before deciding on a software company, sit down and determine what your shipping needs are, current problems being experienced, desired carriers, and what results you would like to receive by using the software. This information will help companies give you the most accurate proposals for managing shipments and help you make the most well informed choice.

Maximizing Productivity With Integrated Shipping Software

In the last 20 years, the shipping industry has taken a giant step toward automation. Since then, transporting cargo has never been the same, but in a good way. Work has become less labor-intensive. Digital data processing has replaced paper works. In short, the entire shipping process has become faster, error-free, and much more efficient.

Nowadays, most modern shipping lines are equipped with various kinds of shipping solutions software offering best cost benefits and enhanced operational efficiency. Integrated shipping softwaresimplifies shipping processes and maximizes productivity by automating various tasks which otherwise requires a great deal of time and manual labor to perform.

Shipping company software provides scalable, enterprise-wide solutions to help carriers minimize operational expenses and maximize profits. It enables shipping lines to control shipping activities across multiple services and between ports through any internet connected device. Utilizing the power of the internet, operators can manage cargo flow from a central office, and monitor agents, equipments, and vessels from a single point which is more efficient than having several control offices in different locations.

Marine software solutions are “not one-size-fits-all” and each type is usually designed to perform certain functions only in the shipping process. Vessel operators must identify needs and find the right type of software to be integrated into their existing systems infrastructure.

Time and cost are significant factors in every shipping transaction. Carriers must always consider the most efficient and profitable transactions to remain competitive. Absent a reliable system to forecast transaction costs and risks, several problems could arise, such as delayed shipments, financial losses from unforeseen expenses, and unhappy customers.

Voyage Estimation Software or Voyage Calculation software allows vessel operators to assess the profitability of each transaction before calling a port and during a port call. All relevant expenses are considered and provide a complete picture of the costs per port call. Voyage Estimation Software can be used run multiple calculations simultaneously so carriers can compare routes and go for options with the best commercial value. Operators can estimate port costs, canal fees, charter costs, bunker costs, and load/discharge costs automatically to forecast expenses accurately.

Container Tracking Software is another type of maritime software solution which makes it easy for operators to identify current location of containers and cargo. It tracks the times and locations when each cargo is entering/leaving the port and when it is loaded/discharged.

Calling It Quits: Is Abandoning Legacy Systems for Ready-Made Shipping Software All Worth It?

One of the tougher decisions every shipping executive has to make has to do with replacing an outdated technology with more efficient shipping software. As it turns out, replacing an ageing IT platform is a lot more complicated than it sounds, particularly in such a fast-paced business environment as liner shipping. History has been a witness to countless cases where poor implementation of new technology has resulted in more harm than its supposed benefits.

Yet, despite this fact, more and more shipping operators, NVOCC’s, and logistics solution providers choose to make the difficult, and yet rewarding, decision of switching to more advanced liner shipping software for all the right reasons. Regardless of their desired outcomes, these shipping companies abandon their ageing legacy systems, not because doing so is the better alternative available, but because it is the only option that is left in order for them to remain competitive.

Around two or three decades ago, many large shipping companies chose to build bespoke IT platforms to automate their internal logistics processes. This was, without a doubt, a good decision back then because it helped operators to streamline their operations and make best use of their in-house resources. Transporting goods in containers became a lot easier and profitable using IT platforms specifically built for container shipping, such as container management software. Eventually, operational costs were significantly reduced, efficiency increased, and shipping companies gained competitive advantage over competitors who could not afford such investment.

However, the problem with using bespoke IT systems was that they generally required a huge capital of up to 50 times the cost of off-the-shelf shipping software in some cases. Aside from the hefty initial investment, maintaining those custom-built IT platforms was also very expensive. First of all, building a bespoke system required hiring a skilled in-house software programmer, and in most cases, a team of additional in-house IT staff to maintain and keep it running. And since those systems were mostly custom-tailored to exact specifications, technological developments quickly made them age in just a few years. Since software used (and still tend) to run in five-to-ten-year cycles, operators could only hope that they could, at least, make back the cost of their investment before their platform became obsolete.

To address these problems and make business more profitable, shipping software companies have developed ready-made solutions which can be purchased off-the-shelf. These types of shipping software are not only cheaper to implement than traditional bespoke systems, but are also proven to be a lot easier and less-expensive to maintain. To ensure wide-range and protracted usability, packaged software solutions incorporate a “switching” mechanism which allows each application to be customized to suit individual user or function, and other company peculiarities. This mechanism also allows operators to upgrade their existing IT platform to newer versions without the need for complicated and expensive re-programming.

Aside from a streamlined business process, shipping line software solutions are also instrumental in improving customer service and value. Unlike before, customers nowadays are more informed, and accordingly, more demanding. They want to be able to keep track of their shipments and have some degree of control over the shipping process. Container tracking software is designed to provide customers and vessel operators a complete and up-to-the-minute visibility over cargo movements. This not only enhances customer experience through value-added services, it also improves the shipping company’s reliability, which opens the door to more clients in the future.

Lastly, enterprise shipping software enables operators to reduce costs on fuel and other operational expenses. Fuel cost has always been a matter of great importance in shipping, and it truly deserves every liner vessel operator’s attention considering the fact that bunker accounts for more than half of a ship’s operating expenses. To reduce fuel consumption, shipping companies are implementing cost-saving measures such as finding more direct routes, installing more efficient propellers, and creating more hydrodynamic vessel designs. On top of these, many liner vessels now use bunker management software to monitor and manage their bunker expenses more efficiently.

Technology evolves very quickly, and shipping companies must evolve with it if they must continue to survive. By switching to modern platforms based on enterprise shipping software, liner vessel operators gain greater competitive advantage than what bespoke IT systems can provide.

Logistics Software Solutions Can Benefit Your Company in Three Basic Ways

When companies present their transportation logistics solutions, they have tendency to either engage in corporate speak and not really say much about their solutions or speak with such expertise that they fail to give you a basic understanding of how logistics solutions can benefit your company in a daily way. For small to midsized companies, transportation logistics typically arrives in one of two forms: by a company outsourcing its logistics to a third party logistics (3PL) provider or by implementing logistics software solutions that are available as an online software application.

Given that logistics software offers an easy to use interface can be customized to a company’s particular shipping needs and costs far less than outsourcing to 3PL providers, it’s usually the logistics option of preference for small to midsized companies that don’t have the luxury of a shipping fleet or a large shipping budget. If you’ve heard of logistics software but are looking for a basic understanding of how it can aid your shipping process, we offer the following overview of how logistics-software solutions help companies in terms of freight optimization, shipping route optimization and shipping method integration.

Freight Optimization

For small to midsized companies that regularly ship less than a full freight load of products, freight optimization typically subsists on finding the best less than truckload (LTL) shipping options. LTL shipping is when a shipping carrier lets companies ship partial loads that combine to compose a full truckload. The cost value of LTL shipping comes from shippers splitting the cost of a full freight load. Although less than truck load shipping offers low shipping rates, due to numerous stops for delivery and pick up, it often takes goods longer to reach their destination than in other shipping arrangements. Nevertheless, logistics-software solutions can be used to find less than truckload carrier routes that offer the best delivery time. Because warehouse stops are a common feature of freight shipping, logistics software also offers warehouse optimization capabilities.

Shipping Route Optimization

If you use a 3PL provider, you probably won’t have any idea what shipping routes your carriers are using. But shipping routes are a major factor in determining overall shipping cost. Logistics-software can analyze shipping routes according to multiple criteria, including: length of route, traffic patterns, road quality and construction patterns. One example of how route optimization can decrease shipping cost and improve delivery time is by analyzing routes in terms of travel time. For example, a route that is shortest in distance may be longer than another route in terms of travel time due to traffic patterns.

Shipping Method Integration

Shipping method integration is an unofficial term that refers to the ability of logistics software to suggest integrated shipping methods for the sake of reducing shipping cost and improving delivery time. For example, even though air shipping is traditionally more expensive than ground shipping, logistics software might suggest shipping certain shipments by air due to expensive, unavoidable warehouse fees that would result from ground shipping. In addition, logistics software may make such suggestions as shipping products halfway to their destination by boat and the other half by freight truck.

Transport Software Solutions Range From Simple to Complex

One of the most exciting aspects of starting a business is daydreaming about how it will one day become a major supplier of its particular products. But as you’re company goes from small to large, you’ll eventually be faced with the tedious process of arriving at the best solutions for your company’s particular shipping needs. If you’re company grows large enough, you may eventually purchase your own shipping fleet and hire fulltime logistics professionals to manage your shipping process. But until then, you have one of two options for achieving the optimal shipping solutions: outsourcing your transportation logistics to a third party logistics (3PL) provider or implementing transport software solutions (i.e. truckload logistics software).

Although contracting with a 3PL provider will help you realize logistical solutions, it will cost you more money and present you with less shipping options than implementing transport software solutions. Because management based 3PL providers make their money by charging companies more than the shipping solutions that they provide actually cost, you essentially end up paying for a middleman to negotiate your logistics solutions. And because management based 3PL providers only work with carrier companies that offer them a rate discount for delivering a steady stream of business, your company has the potential of missing out on the ideal shipping-solutions for its particular needs simply because a 3PL company must put its corporate interest before its clients’ shipping interest.

One of the main reasons that companies continue to contract with 3PL providers is that, because logistics isn’t one of their core competencies, they feel incapable of performing logistics. Nothing could be further from the truth. Whether your company needs local shipping-solutions that transport your products directly to retailers, multi-state shipping solutions that transport unfinished products to multiple assembly locations before transporting them to retailers, or global shipping solutions that combine multiple forms of transportation, the easy to use, customizable interface of logistics software allows management to identify and enact the ideal transportation methods.

If you’re starting your company from scratch, chances are that you want to remain in control of its operations for as long as possible. Logistics software helps you do this, and it gives you the option of using the software as an online application or an internal application, depending on your company’s needs. Regardless of your shipping needs (LTL shipping solutions, TL shipping solutions, Parcel shipping solutions, etc.) one thing is certain: implementing transportation software solutions can have a significant impact on your bottom line. Research shows that companies that implement logistics software can realize a 10 percent decrease in their overall shipping costs after only one year.