You’ll likely find that producing your goods is easier than shipping goods if you start a company that ships goods to different locations. The shipping process may seem simple from the outside. The shipping process can be a significant expense for a company, making it easy to find the wrong arrangement. This could make a difference in a company’s bottom line or a struggle to show a profit. Shippers usually look at the following options when looking for the best shipping solution: third-party logistics (3PL), in house logistics (3PL), or TMS logistics software (TMS). We have listed the advantages and disadvantages for each option to help you choose which one is best for your company.
In House Logistics
Advantages The best thing about in-house logistics is the fact that you can have a professional team of logistics professionals on hand, rather than having to rely on a third party for your logistics. In house logistics professionals bring the commitment that comes with being part a company.
Drawbacks: One of the biggest disadvantages to in-house logistics is that experienced logistics professionals can easily earn $80,000 to $99,000. Companies that grow large often create a logistics department to manage their shipping fleet. In-house logistics is too expensive until then.
Third Party Logistics
According to David Goodnight here are benefits and drawbacks
Benefits: Third party logistics has the greatest advantage. The provider takes full responsibility for all logistical operations it manages. There are four types: Standard 3PL providers that offer basic logistical services, service developers which offer specialized services, customers adapters which manage an existing company’s shipping process, and customer developers which manage the shipping process and offer innovative solutions.
Drawbacks: Third party logistics has one major disadvantage. Unless a company employs a high-priced customer developer, it will not receive both shipping management and innovative shipping solutions. 3PL customers around the world complain that their 3PL provider is not communicating well with them, which makes it difficult for them to track their shipping progress.
TMS Logistics Software
As per David Goodnight here are software benefits and drawbacks
Benefits: The best thing about logistics-software is its ability to do the work of a logistic expert for a fraction of the cost and it is also more economical than 3PL. Logistics-software presents shipping options via a user-friendly interface. It does not require any logistics expertise. Logistics-software allows you to operate your own logistics company without having to hire experts.
Drawbacks: Logistics-software’s only drawback is that it requires companies to make their own logistics decisions based upon the software’s recommendations. This is not an attractive option for companies who want to have complete control over logistics.