1. What is shipping software?
Shipping software is a system that helps automate managing and tracking freight delivery. Shipping software can be used by freight delivery companies, 3PLs, international import/export companies, and businesses doing outbound shipping via multiple carriers.
Shipping software features often include shipment tracking, freight forwarding, customs paperwork management, billing, quote generation, scheduling, and logistics functions. Shipping software is related to transportation management software, supply chain management software, distribution software, fleet management software, logistics software, and warehouse management software.
2. The benefits of shipping software
- Improve transit transparency: Know where the product is at at each step of the logistics process with tracking statuses for items and shipments. With this information available to you, not only can you address roadblocks quickly but you can also share the tracking updates with your customer.
- Access reduced shipping prices with 3PLS: Take advantage of the reduced shipping rates with 3PLs—such as USPS or FedEx—that software vendors have already negotiated. They will extend these rates to their customers using their software, allowing you to get lower shipping rates without having to negotiate on your own.
- Generate accurate shipping labels and customs paperwork: Use label templates, add your business logo, and automatically generate required paperwork as needed within the software. This reduces errors of manual entry and streamlines the logistics handoffs at each touchpoint in the process.
3. Typical features of shipping software
- Inventory management: Track individual product stock levels and locations to improve the speed to fulfillment and get the product out the door quicker.
- Shipment price calculation: Compare and select the best carrier rates in real time for individual or bulk shipments. Most vendors already work with the top 3PLs, such as USPS, UPS, DHL, and FedEx.
- Shipment tracking: Generate shipment tracking numbers and monitor orders. You can also provide the customer with the tracking number.
- Bills of lading: Generate bills of lading or shipping labels for bulk batches. The software will provide standardized paperwork with accurate information for you.
- Dropshipping: Reduce warehouse costs by shipping product directly from the manufacturer or from another retailer.
- Import/export: Improve international processes of importing and/or exporting goods by tracking landing costs, customs paperwork, and delivery times.
4. The cost of shipping software
Many products in the market are priced on a monthly basis for an unlimited number of users or by shipping volume. The below pricing ranges are for per user per month only pricing as stated on vendor websites. Pricing can be divided into three pricing tiers based on their starting price:
- $2 – $10
- $10 – $49
*The pricing included is for the entry-level/lowest priced offering found on vendor websites on February 26, 2020. These ranges correspond to the 25th, 75th, and 100th percentiles of pricing information gathered from vendor websites of sample products.
The above list summarizes pricing for the base plans of most products. An enterprise or premium product that is priced higher may include additional features, such as dropshipping, inventory management, and a vendor portal.
5. Considerations when purchasing shipping software
- Compare shipping software to a full-suite supply chain management system. Review your business model and needs to make sure the features you need are all included in the shipping software. If you own other stages of the supply chain process, such as manufacturing or warehousing, it’s possible you need a full-fledged suite of applications in a supply chain management system.
- Your integration needs with other systems. Your shipping business is likely already using another software program such as inventory management, accounting, or an ERP. The shipping software you choose might need to integrate with these tools. Talk to the software vendor about their costs and capabilities to integrate with the specific software you already have.
- Potential hidden costs. Calculate the total cost of ownership for your new shipping software, beyond just the monthly or annual licensing charges. These costs include charges for data migration, training, and upgrade fees. The software vendor should help you to calculate all costs, including the upfront and ongoing—or potentially hidden—ones.
6. Relevant shipping software trends
- Dropshipping reduces inventory costs and meets new customer demands. As online shopping continues to grow, retailers now have the ability to sell to customers regardless of location. This is where dropshipping, a supply chain management method of the manufacturer or other warehouse location ships out the product, is a low cost and low risk way to expand and meet this demand.
- Geofencing improves shipping automation. By creating customized maps for logistics plans you can set automated workflows that make the most of warehouse or retail locations. For example, if a pizza place uses a 5 mile radius from their store to dictate where delivery is available. But the store is near the town lake and hence half the delivery area is actually just water. Not so helpful. With geofencing, the pizza place can avoid issues like this.
- 3PL partnerships are moving beyond just the retailer to transportation company combo. McDonald’s and Ford’s new partnership made the news recently. Banana Republic and Postmates is another unexpected one. It might be time to think outside of your industry-specific partners and see who has an already established logistics network in your area of need to expand quickly and meet customer demands for quick delivery.
Products evaluated for the pricing calculation were taken from Capterra’s shipping software directory, sorted by number of reviews. The pricing ranges exclude freemium versions of the products. The features highlighted were identified based on their relevance and the percentage of products in Capterra’s directory that offer them.
The following sources were used for this document:
- Merchant Fulfillment vs. Third-party Fulfillment vs. Dropshipping: Which Should You Choose for Your Ecommerce Business, Capterra (Date accessed: February 27, 2020)
- Using Geofencing to Automate Logistics, Timekeeping, and Shipping, Capterra (Date accessed: February 27, 2020)