While larger-scale logistics solutions (known as "integrated suites" of software) tend to cover a wide variety of supply chain functions, freight software programs—generally marketed as “freight forwarder” or “freight broker” software—are specialized logistics solutions that focus on the shipping phase of the supply chain.
System features will vary depending on the vendor, but some freight software packages offer inventory control functionality, such as order and invoice automation, and dispatch capabilities in addition to shipping functionality. Because these features can be specific to certain shipping needs, it’s important to find the freight software system that best suits your business.
To help you understand the market, we’ve put together this buyer’s guide. Here’s what we’ll cover:
Freight software is a type of logistics software used primarily for tasks such as shipment quoting, carrier selection and route planning, among others. Many third-party logistics (3PL) businesses use freight software to facilitate their daily operations.
While some vendors offer freight software as part of a larger, integrated logistics platform, those systems may be too complex or cost-prohibitive for small to midsize shipping businesses that only need functionality related to their specific operations.
There is no uniform definition for these products, due to their variation in functionality. However, freight brokerage products are often geared towards specific types of businesses—for example, smaller 3PLs that only need to facilitate the shipment of goods between a manufacturer and customer. Freight forwarder software, on the other hand, may include added functionality, as freight forwarders generally offer storage options and may even ship goods themselves (more on this below).
Carrier selection feature in URoute frieght software
Because the freight software category encompasses a variety of different products, it’s important to select the features specific to your business needs. Many freight software products offer some combination of the following features:
|Quoting||Allows users to estimate prices for individual shipments based on factors such as weight and distance. This function is needed by 3PLs and other freight brokers in order to bid on shipments from manufacturers.|
|Carrier selection||Determines the optimal carrier for a particular shipment, using factors such as price and route. May offer a shipment consolidation function to pair similar shipments together for better pricing.|
|Route planning||Also found in larger transportation management software packages; allows users to optimize shipping routes based on distance, fuel cost, load size and other factors. More suitable for domestic shipping operations, as most features are geared towards trucking (some, but not all, solutions can support international operations).|
|Shipment tracking||Provides visibility into live shipments and delivery statuses. Many shipment tracking features offer snapshots of the shipment’s details, special delivery instructions and billing amounts.|
|Dispatching||Tracks delivery vehicle capacity and delivery times. Some features also offer time logs for drivers, as well as other employee-management functions.|
|Inventory management||Monitors freight being stored on the way to its final destination. Suitable for smaller freight and 3PL companies, as these features typically include basic inventory control functions only. (Full inventory management suites provide wider functionality geared towards larger warehouse operations and high-overhead businesses.)|
Again, due to the variance in features that can be included in freight software products, it’s best to begin evaluating options based on the nature of your company’s operations:
Freight brokers. For companies that facilitate the bidding process between manufacturers, shippers and buyers, such as smaller or growing 3PL companies, freight broker software with a simple quoting feature may be the most functionality that is needed. These systems typically include additional tools such as invoicing or shipment tracking, though they may not be necessary for your business.
Freight forwarders. For businesses that do the above and offer additional storage or warehousing services for goods throughout the shipping process, freight software with added functionality may be required. This might include an inventory management component, which would help users keep track of the items coming in and out of their facility, or dispatching capabilities to assist with the shipment of goods.
Pricing for these solutions is dependent on the functionality they offer and the deployment model that is chosen. Deployment models include:
Web-based. This is software that is hosted online, on servers managed by the software vendor, and that can be accessed by users from anywhere via an Internet browser. These are generally subscription-based (“Software-as-a-Service”) systems that charge either a monthly or annual fee, usually based on the number of users who will need to access the system.
Web-based deployment models are the most common freight software offerings on the market, particularly for small to midsize businesses. This is because these solutions often have a lower cost of entry than on-premise systems: There is no setup fee or additional hardware that needs to be purchased.
On-premise. This software is hosted on the buyer’s own servers, typically at the business location. For this type of software, buyers typically must purchase an upfront, perpetual license for continued use of the software; there is no additional subscription fee. However, users might see additional fees for upgrades, customizations or maintenance, and hardware may need to be purchased.
On-premise freight software solutions tend to be larger, more expensive systems that include a wide degree of functionality; they may actually be more similar to an integrated suite of transportation management or logistics software. However, these systems may be the right fit for certain businesses—particularly those with larger shipping operations.
Whichever deployment model you choose, there is one basic rule to keep in mind: the more functionality your freight software provides, the higher the price will be.
We're able to offer this service to buyers for free, because software vendors pay us on a "pay-per-lead" basis. Buyers get great advice. Sellers get great referrals.