Thursday, June 26, 2014

Cloud Shipping: Is It Really Better than Shipping Software?


Cloud shipping is gaining much attention today, not only among merchants and logistics services providers, but even among shipping software companies, who are obviously not happy about cloud-based service providers eating into their market.

As the price of cloud-based services continue to drop fast, hosted shipping solutions become more and more attractive to vessel operators, merchants, and third-party logistics providers who are seeking to reduce costs on licensing, installation and maintenance of enterprise shipping software. However, while cloud shipping promises a cost-effective alternative to packaged software (mainly due to its lower upfront cost) shipping companies must be wary about making the switch to an ‘all cloud’ platform based on that logic alone.

After all, in any business, long-term profitability should easily outweigh huge savings on initial investment.

Yes, there may be times when a cloud-based set-up seems to be the only way forward, especially when your growing business calls for greater scalability. However, there are instances where an on-premise shipping line software solution is more beneficial in the long run, despite the much higher initial investment it usually requires.

  • On-premise liner shipping software offer full control over all systems and logistics processes
  • Packaged shipping software promises better security on corporate data
  • You get a dedicated IT staff for maintenance and support

Ideally, the cloud option works great for certain applications like network monitoring, back-up, and functions performed by voyage calculation and container tracking software – functions that require real-time data.

So, the question lingers: Which is better – cloud-based (hosted) or on-premise (packaged) solution?

The answer is neither and both. One is not absolutely better than the other, and you cannot go wrong with both. In some cases, some shipping companies choose the cloud-based platform because it seems to provide more accurate freight pricing and better access to real-time information for logistics tracking and container management, in addition to a much lower investment capital. On the other hand, many prefer to stick with on-premise liner agency software, even if it is just for security reasons.

For the meantime, it appears that the best option is to find a balance between both platforms, and to create a hybrid system that delivers the best of both worlds.

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