Underlining the Key Features And Cost To Develop A Freight Management Software

A3Logics 19 Aug 2022

How does freight management software help in the scalability and efficiency of the business today? Why has the freight management system become an important component of your business? What is the cost of developing one? All these questions will be answered here in this article.

Whether you are looking for a white-labelled enterprise-grade management software or want to develop from scratch, there are a few requisite features you must have in your system. But, before speaking about its features, let’s travel to the evolution of freight management programs.

Introduction to Freight Management Software

The inception of freight management came when freight brokers teamed up and started using a transportation management software system to move beyond their one-for-one transactions.

TMS was certainly helping the logistics and shipping management services providers to quickly obtain and seamlessly manage a huge volume of data.

This system could consolidate a heap of transactions that can be used to perform activities and predict events. The synthesized data was used for preparing reports for intense analysis. The logistics provider or the IT professional services providers bottled the needful features to sell it to the shippers as freight management software.

The development was fruitful as the shippers, who were unable to buy the top-tier TMS, could easily purchase this solution due to its cost-effectiveness. Freight management software helped shippers save freight rates and operational expenses.

Today’s freight management solution offers a service suite that allows the shipper to accelerate and transform the logistics and supply chain execution and strategy into a competitive advantage. Freight management solutions enable the companies to deliver higher service levels, more capacity, and lower all-in costs.

The technology platform used in a freight management solution is cloud transportation management, which facilitates effective, efficient, and agile coordination between carriers and shippers for on-time delivery of products.

Importance of Freight Management System

Today’s supply chain management has become complex, and companies require a robust solution that can allow them to quickly meet their customer’s needs efficiently while elevating their business strategies and executions.

Efficient supply chain management leads to leaner inventories, in-time manufacturing, omnichannel distribution strategy, maximized customer satisfaction, reducing operational costs, and tightening delivery windows.

Incorporating freight management solutions leverage the shippers to deliver the freight towards the right direction at the right time at right cost.

The global freight management system market is expected to reach $14.3 million by 2026 (Source: PRNewswire). Freight management system estimated $10.1 billing growth in 2020 but, the global pandemic has readjusted the growth estimation. In the upcoming 7 years, the CAGR of increasing freight management adoption is expected to scale 6.7% globally.

The freight management market in the U.S is expected to be $3.5 billion in 2021, while in China, it is predicted to reach $1.5 billion by 2026.

Common Drivers of Freight Management Service

For better access to freight capacity, lower operational & freight costs, and higher service levels, companies look for reliable transportation and logistics software development services that can offer them an effective system. A few drivers that increased the adoption of freight management software are –

  • New technology requirement.
  • Service KPIs sufferings.
  • Sudden seasonal volume spikes.
  • Harder internal support.
  • Changing business models.
  • Changes in geographies.
  • Key personnel termination/employment.
  • Launch of a new product.
  • Lack of management of inbound freight and outbound freight process flows.

Key Features of Freight Management Software

Outsourcing has made development as well as post-implementation support a lot easier and cost-effective. A shipper will have both – an inbound and outbound management program to acquire the best results and better management. Outsourcing the business processes help companies drive as close to seamless logistics and supply chain as possible. Hence, your first task should be – looking for an IT strategic planning services provider to create a roadmap for the development of freight management software.

  • Next, an efficient route and transport mode is vital for on-time deliverance. For instance, assigning drivers & vehicles and choosing the best route to transport your product optimizes your route.
  • Paperwork is as important as route optimization, hence ensuring government compliance of goods & transportation, including insurance of your vehicle and service.
  • Keep transparency a priority. Freight visibility offers vehicle tracking through GPS to have complete transparency of your freight. You can also monitor the package and container individually.
  • For better business outcome analytics and reporting is imperative. Through data collection and analytics, you can quickly optimize your shipping process.

In order to manage your freight operations, you can either look for a private carriage or use a third-party carrier. Depending on your capabilities, you can decide to purchase your fleet and manage drivers. Or simply use third-party to fulfil your goals and transportation operations. 

Let’s elaborate on the underlined features to incorporate in freight management software.

1. The route, load, and transport optimization

Your software must eradicate the key problems that a transportation business has to deal with all the time. Depending on a specific constraint, type of destination, vehicle limitations, and traffic, your software should be able to build safe and clear routes for faster delivery.

Enterprise software development companies usually incorporate routing tools such as google optimization tool or MapQuest that are integrated with an API that quickly connects to your freight management software easily.

Additionally, your software outsourcing partner can incorporate a load planner tool, which encourages route optimization to check the right hierarchy of goods to load and unload faster. Your load planner tool can quickly calculate the size, weight, class, warehouse, & many more.

Route Optimization with multimodal and intermodal

For faster, cheaper, and quick services, shippers generally use multimodal shipping or intermodal transportation options. The former type is used by the shipper, who prefers third-party carriers where movements remain centralized and under the control of the vendor. While the latter is used, when the shipper chooses different carriers focusing on lower rates for transits.

2. Regulation and document management

Since the transportation industry relies on documentation, the software must be robust enough to manage complete freight-related paperwork. The document management is segregated into –

Tariffs and regulation management

These kinds of documentation involve international, air, and sea shipping papers, such as waybills, bills of lading, packing lists, certificates of origins, and dangerous goods notes. Digital bill of lading and e-AWB integrations can help shippers ensure that goods are compliant with government regulations, incoterms, and 3PL agreements, as well as seamless sync with TMS.


Accounting is imperative for any business, where a few businesses, like logistics and transportation management business, have to manage every day. In a transportation business, freight accounting is composed of six components –

  • Freight quote & cost – This is defined as the rate of the shipping presented by the carrier.
  • Freight invoice – A bill that contains basic information of shipment that matches the bill of lading.
  • Auditing invoices – The process audits all the bills entered in the accounting system for their validity before payment.
  • Payment – This defines the payable services for the invoice raised.
  • Consolidated invoices – This process is used by the freight brokers for weekly payment.
  • Freight in & out – This involves the shipping cost from bringing the goods to the company to delivering them to the customers.

Claim management

One of the major risks in a freight or transportation business is the loss or damage of the shipment. Companies associated with different carriers have to comprehend as well as align with different rules set by each. Instead of manually addressing them, the right logistics management software can standardize the process claims.

The digitized claim management enables companies to quickly respond to the damage caused after verifying the documents depending on domestic or international shipments.

3. Data Gathering and analytics

The shippers are associated with multiple carriers and other logistics providers. A reliable solution not just helps in making stronger & better connections but also helps in optimized costs. Data gathering and analytics feature can allow shippers to –

  • Relate to consumer patterns and make adjustments accordingly.
  • Compare costs of different modes of transport and choose the right one.
  • Track down carriers and partners (KPIs) to underline which one is performing better.
  • Allocate warehouse bays.

In order to perform complex analytics, you can always look for an IT consultation services provider to incorporate end-to-end BI infrastructure, such as –

Data integration –  to organize the data as per company rules and goals as well as use them for future processing.

Data representation – offers a clear representation of data through reports for the end-users to assist them in making an informed decision. The data can also be used for predicting customer demand, carrier and driver performance, road and port congestion & more.

Data sources – include internal as well as external sources of data, such as TMS, ERP solutions, warehouse management systems, ELD in trucks, parcel tracking data, & other third-party applications. The data retrieved can be filtered, organized, and transformed for future management.

Data warehouse – allow data engineers & analysts to quickly access the data for preparing data models and interfaces.

4. Tracking and Tracing Shipments

Transportation is a kind of business that demands tracking and tracking the location of its goods as well as a vehicle to ensure reliable and timely delivery of goods. A good and most commonly used way to track shipment is through GPS. Other than GPS, barcodes and RFID are also used.

GPS tracking

The GPS-incorporated vehicle leverages the shipper to observe every movement of the vehicle. The technology sends current location data to the parent company. When the technology is combined with the electronic logging devices (ELDs) and telematics, a shipper can retrieve detailed information, such as driving style

  • Fuel consumption
  • Toll records
  • Open door sensor
  • Temperature inside trailers, & much more.

This type of data can help in scheduling or general visibility to avoid delays or share information of the driver with the customers.

Barcode and RFID tracking

This technology can be used to provide precise and detailed tracking, which includes – each parcel, pallet, and even the containers received with barcodes or RFID chips. RFID chips and barcodes can be quickly scanned and send the status of the shipment to the client to ensure the deliverance of the goods.

Here, predominantly EDI solutions and API integrations are used to make the exchange of information between different systems real quick.

With Barcode or RFID tracking technologies, large enterprises can have quick and detailed visibility into their valuable data for further analysis. The data can be transformed into insights using TMS and then applied for making operational improvements.

Cost and Process of Freight Management Software

Most transportation management software operates the same way. The below table outlines the process of complete freight management.

Any development stage begins with the discovery phase that takes up to 2 weeks. The next step is followed by the user interface and user experience design that also lasts up to 2 weeks.

After the two processes, programming begins with the front-end and back-end development. Based on a minimal set of requirements, the full circle of development may cost $200K approx. This phase may take around 6-8 months. Any supplementary service, such as mobile apps for clients and drivers, may cost extra (say around $90k)

After the development part comes the testing part. The testing part is conducted by the QA testing services providers who perform both manual and automation testing for quality assurance.

Deployment is the launch of the software, whereas post-launch support is to give long life to the software by timely bug fixing and integrating new features to the software.

So, choose your priorities for successful development and connect with A3Logics to develop a robust and scalable freight management solution for your business.