What Drives the Cost of Forwarder TMS Software?

Whether you run a small forwarding operation or oversee a large, multi-national international company, implementing best-in-class forwarder TMS software can greatly enhance your operations. However, one of the primary concerns for many businesses is the cost of the freight forwarder software. What drives the cost of a forwarder TMS suite, and how can you make an informed decision when investing in such a crucial tool? If these are questions you’ve been pondering or were about to ask, we have the answers in this in-depth article.

Why Is a Scalable Forwarder TMS Better in the Long Term?

Forwarders’ needs change and evolve over time. With ever-changing customer expectations along with new regulatory requirements, you need a partner that can not only support you on day one but continue to support you as you expand your business and service offerings. For this reason, it’s important to gauge if your forwarder TMS can grow with you. If, for example, you begin servicing a new trade lane or need to submit a security filing for a new country, your technology partner should have easy methods to add modules and options in parallel with business growth.

Tip: While some lower-cost software providers may offer functionality to clear or track shipments, some systems may not fit your long-term needs. Look for a world-class software provider that fits your long-term objectives and that allows for the integration of new features, functionalities, or modules without requiring significant disruptions to daily operations.

Why Is Local Support Vital for Smooth Operations?

Logistics service providers (LSPs) operate in a fast-paced and competitive environment, where any interruption to operations can mean lost revenue or worse, an upset customer. With unique shipment scenarios and complex cross-border regulations, local technical support is essential should a challenge or support question arise. In the event of technical issues or emergencies, having access to a local support team with deep domain expertise allows for quicker resolution of issues which can minimize downtime, prevent potential disruptions to business operations, and enhance customer service. Additionally, local technical support facilitates effective communication, as language barriers and time zone differences are often minimized.

Tip: A forwarder TMS with local support is vital for forwarders to remain agile in today’s just-in-time forwarder environment. Technology providers who outsource or offshore their support may be less expensive, however, the opportunity cost and potential impact to smooth operations and reputation far outweigh the cost of using a legacy software solution.

Why Integration Capabilities Are a Core Component of Logistics Software?

A freight forwarder TMS is most effective when it can seamlessly link internal systems and connect with other supply chain participants to reduce data silos, improve accuracy, and reduce manual data entry. The right solution should not only connect internal and external platforms but also intelligently repurpose the information to deliver customer-facing status updates, provide alerts by exception, and enable customers to book, ship, and quote on demand.

Beyond this, a forwarder TMS should enable connectivity via a flexible range of protocols such as Application Programming Interfaces (APIs). In addition to modern integration protocols such as APIs, your forwarder TMS should also support current communication protocols such as EDI since many existing third-party providers continue to use these cost-effective technologies.

Tip: Investing in a software solution with robust integration capabilities may have a higher upfront cost but can save you time and money in the long term by streamlining your operations and reducing manual data entry.

Why Is Feature-Rich Software Critical for Forwarders?

A wide range of software features is vital for forwarders since it enables them to efficiently manage and optimize complex logistics and supply chain processes. A comprehensive software solution tailored to the needs of freight forwarders streamlines operations by providing features including real-time tracking, documentation generation and retention, customs compliance tools, comprehensive accounting, and financial analysis, denied party screening, robust reporting capabilities, and automated alerts. A wider range of features not only enhances efficiency but also minimizes errors, reduces costs, and improves overall customer satisfaction. Additionally, the ability to adapt to changing industry trends and emerging technologies ensures that freight forwarders remain competitive in a dynamic global market.

Tip: Look for a software provider that offers a comprehensive suite of features that not only can help forwarders move freight but can keep pace with regulatory change and provide customer-facing visibility. While lower-cost solutions may provide minimal functionality, such tools do not address the diverse challenges and complexities inherent in forwarding operations.

How Do User-based and Transactional SaaS Costs Impact Pricing?

There will be monthly costs for operating a forwarder TMS by user or by transaction. What is key is the flexibility of the software provider. Some software providers offer hybrid pricing models, allowing you to combine user-based and transactional elements. This flexibility enables you to tailor the pricing structure to your specific needs. A flexible software provider should be open to customizing pricing plans based on your business requirements. This could involve negotiating terms, adjusting pricing tiers, or providing a custom pricing model to meet your unique needs.

Tip: Look for a software provider that can flexibly mirror business requirements. Seek out a technology vendor that can offer volume pricing for user-based or transactional pricing. Think longer term as well and consider if your software provider can expand the number of users, for example, or provide new service offerings as your business expands.

How Do Implementation Costs Impact Pricing?

When considering a forwarder TMS solution, it's essential to have a clear understanding of the implementation costs and how they align with your budget and business objectives. Additionally, inquire about any potential hidden costs, and discuss the provider's approach to handling customization requests and unforeseen challenges during the implementation process. A transparent and collaborative relationship with the software provider can contribute to successful implementation and long-term value for your business.

Tip: Best-in-class software providers are committed to getting you up and running as soon as possible. Leading software vendors should be dedicated to both your long and short-term success and should have an expert implementation team dedicated to your go-live and ongoing support.

Do Cloud-hosting Costs Impact Pricing?

Before exploring how a cloud-hosted solution affects pricing, it is critical to note that cloud-hosting is more cost effective than self-hosting. Cloud hosting eliminates the need for significant upfront investments in hardware, servers, and data center facilities. Cloud hosting also allows for easy scalability, enabling businesses to scale up or down based on demand. This flexibility is particularly beneficial for dynamic workloads. However, there will still often be a cost for hosting in the cloud. Documents may need to be retrieved on-demand to meet regulatory requirements, for example.

Tip: Look for a SaaS solution provider that is cloud native. Seek out a technology vendor that not only has a proven record of cloud up-time, but that also can host your data in a secure facility with a redundant server architecture. A best-in-class provider should also offer a fixed cloud-hosting pricing structure to ensure that operational expenditures are consistent regardless of usage.