What Is Logistics Management Software & How to Build It: Complete Guide

According to a Gartner report on top trends in logistics, logistics companies allocate 73% of their IT budget focused on growth opportunities and enhancing internal performance. But only 30% of companies meet their digital transformation goals, and another 44% show limited improvement.

The ROI doesn’t look great. Why such limited success? Logistics management software is a complex and challenging project. It requires expertise in both business processes and building an expandable software system.

To do this, let’s build a bigger picture. This guide analyzes in detail how:

A logistics management system — logistics management software — is a full-fledged solution companies use to automate, streamline, and optimize their processes.

Companies use digital technologies to manage supply chain activities, including:

Logistics management systems enable businesses to collect data and turn it into meaningful insights.

Read how logistics software has made a difference for one simple startup:

When Amazon launched in 1997, it had two fulfillment centers. Today, Amazon is valued over 1.48t, the world’s fifth most valuable company. Amazon is one of the Big Four, along with Alphabet, Apple, and Meta. The numbers speak about themselves:

The largest postal services, like UPS and FedEx, do not provide anything like this.

The secret of Amazon’s commercial success is a perfect and scalable logistic scheme supported by Amazon’s custom logistics software solutions that are exclusively Amazon centric.

Define Objectives: Think of issues you want to improve and goals you want to reach by developing logistics management software, such as improve fleet efficiency with automated route planning and re-planning, increase supply chain visibility with real-time tracking, and so on.

User Roles: List user roles you want to add to your logistics software management system. These can be suppliers, inventory or sales managers, delivery drivers or carriers, and customers. 

Core Features: Decide on key modules (order management, warehouse control, indoor asset tracking, automated route planning, or carrier management) and related functionality that will enable users to complete tasks efficiently.

UI/UX Design: Think about how the design will enable the successful adoption of your new logistics management system. You need an intuitive user flow with an interface that remains clear on desktops, tablets, and smartphones.

Platform Choice: There are several options, from expensive to cheap: you can assemble an in-house team, hire an onshore or nearshore provider of logistics software development services, find an offshore agency — they all can build a custom system, or adopt a low-code solution with rather generic look and functionality — selection depends on complexity and available budget.

Architecture: You or your team should plan for system and infrastructure components to ensure high performance and scaling. 

Backend: Develop business logic and database structure. Connect parts of your logistics management system and third-party services via APIs for secure and efficient data exchange. 

Frontend: Program user-facing applications based on available designs. These can be desktop, web, or mobile apps. Consider making a separate tablet app for user convenience. 

Agile Sprints: Consider working in short, two-week cycles on your logistics software. They will allow the development team to ensure faster project turnaround while you can improve your processes more quickly.

Thorough Testing: QA specialists test the software source code against different scenarios to ensure high security and performance across different user devices. Automated testing is usually applied as part of a CI/CD pipeline.

Integration: Senior developers connect new logistics functionality with your existing solutions (databases, ERP, suppliers’ software, and more) to ensure consistency and seamless data exchange. 

Deployment: The responsible project team members deploy the logistics system or its update on live servers with consideration to data security and compliance with applicable regulations.

Training: Help employees understand the positive changes coming with the new logistics management system functionality by providing necessary guidance or training.  

Feedback Loop: Gather user feedback and use it to draw insights on further system expansion. 

Monitoring: Consider engaging DevOps engineers who will help you implement continuous monitoring and track performance of your logistics management system, preventing outages or slowdowns.

IT Craft’s logistics software development services are based on 25+ years of technical excellence, deep domain expertise, and commitment to clients’ long-term success, which makes this company a strong choice for different logistics businesses, from startups looking to launch an MVP to enterprises that want software modernization while keeping processes uninterrupted.

A business-focused approach allows IT Craft’s logistics software engineers to find efficient solutions for identified problems and deliver them within the cost and timeline estimates. The clients highlight the company’s flexibility in cooperation terms, which allows it to meet changing needs on short notice.

Services & expertise: custom logistics management solution development, logistics management solution consulting, digital transformation, legacy software modernization, data migration and third-party integrations, software maintenance and cloud cost optimization. 

Technology stack: Kotlin, Swift, Python, Java, TypeScript, C#, React, Angular, React Native, Flutter, Xamarin/.NET MAUI, Spring, .NET, Django, Node.js, Laravel, Symfony, AWS, Azure, GCP, DigitalOcean, HuggingFace, Tableau, LangChain.

Team size: 330+ experts.

Logistics Management System Development for MyCarrier

The client envisaged a cloud-based solution to streamline shipment management. The software automates multiple steps while decreasing uncertainties, ensuring transparent carrier and shipment management.

The IT Craft team delivered an MVP portal on time, helping the client win over first users. It focused on feature expansion and product scaling, keeping up with the client’s growing project needs.

Results: 

• $36.8M funding raised.
• Evolving to a leading TMS solution in the client’s market.

Read Case Study

Apptunix offers expertise in several industries — logistics is among them — and can be an option for companies that look for cost-efficient logistics solutions. It provides end-to-end software development services, boasting a long list of use cases for a global client base.

The firm’s programmers can handle modern technology stacks needed to implement cloud-native software, real-time tracking, or AI-powered solutions, addressing particular process efficiency and visibility challenges. They actively contribute to clients’ projects, helping refine different ideas.

Services & expertise: custom logistics management software development, project consulting and strategy, compliance and security, ongoing maintenance and support, UI/UX design services, mobile app development.

Technology stack: React, Angular, Next, Ember, Node.js, Oracle, React Native, Flutter, Kotlin, Swift, OpenAI, HuggingFace, LangChain, Docker, Terraform, AWS, Google Cloud, Azure, DigitalOcean, Square, Adyen, Alipay.

Team size: 250+ experts.  

Top clients: Rose Rocket, PIKUP, Naaviqload, Rush app.

A boutique firm with deep focus on its clients’ business success, Invonto goes beyond just logistics software development. It blends engineering expertise with business strategy to help companies build software that reflects their operational realities best, while some projects have been built for enterprises.

The company’s specialists are renowned for creating future-proof solutions, covering the entire implementation path, from blueprint to post-launch optimization. Little surprise that Invonto appeared in many reputable online publications and received a number of awards for the quality of its rendered services.

Services & expertise: logistics software development, strategy and digital transformation consulting, IoT development, legacy application migration, cloud integration and DevOps, AI Consulting, web and mobile app development. 

Technology stack: Node.js, C#, Java, Python, .NET Core, Express, Spring, RESTful API, AWS, Azure, GCP, GitHub, GitLab, React, Angular, Swift, Kotlin, Unity, ARKit/ARCore, Mistral LLM.

Team size: 12+ experts. 

Top clients: ISTA, Merck, Sealed Air Corporation, CMCO, Party Rental Ltd.

iQlance Solutions has been included in our list for its condensed industry expertise, a customer-first approach, and, most importantly, budget-friendly deliveries of logistics management solutions. The company can create functionality for various needs, from route optimization to inventory tracking and reverse logistics.

iQlance Solutions offers end-to-end capabilities, promising quick access to missing specialists, as the company claims to assign developers just within two days. In turn, the clients mention its flexibility in adapting to changes and strong technical skills in many modern technologies. 

Services & expertise: logistics app development, mobile app development, web development, ASP.NET development, UI/UX design services, IT staff augmentation, SEO services, API Integration.

Technology stack: React, Angular, .NET, Node.js, Laravel, Ruby on Rails, Redis, Firebase, MongoDB, Swift, Kotlin, React Native, Flutter, Xamarin, Azure, AWS, GCP, Docker, Kubernetes, Jenkins, Git. 

Team size: 95+ experts. 

Top clients: Moving Force, SB Trucking, Flexible Packaging Co, Trioworld, iFishFight.

Cleveroad is another strong candidate. This agency has the necessary technological expertise in developing tailored logistics management platforms that clients use to solve their particular visibility, automation, or optimization problems. It offers a client-focused approach, locking in on business challenges and ensuring efficient project execution.

The company’s services span across the entire project lifecycle. Its specialists can help with discovery, implementation, maintenance, upgrades, and more, while adjusting flexibly to evolving requirements. Cleveroad developers can work with different regulations and compliance standards, both local and international.

Services & expertise: logistics software development, code audit for logistics projects, supply chain software modernization, AI integration, UI/UX design, API development, managed IT services. 

Technology stack: React Native, Flutter, React, Angular, Vue, Node.js, .NET, PHP, Python, Java, Swift, Kotlin, AWS, Azure, GCP, Docker,

Team size: 130+ experts. 

Top clients: MoveUp, AVFX, Penneo A/S, Occaz, Betabox.

Logistics companies comprise about 10% of the US GDP.

Traditionally, companies in the following categories handling logistic processes are first in line to use logistics management software:

Companies can address the following challenges with the help of software:

Logistics management software optimizes all processes related to logistics or enterprise operations:

Software for logistics management also often includes additional modules to manage the company structure:

Two logistics management software options are possible: off-the-shelf and custom solutions.

You can search the market for off-the-shelf solutions to find your best logistics management software. Those solutions might work well enough. Or they might not. The guaranteed method for logistics management software is one tailored to your specific requirement. For greatest peace of mind and success, you need a custom application.

Choosing a custom application means your input is integral in both the design and development of the logistics software specifically suited for your company. To understand how to create such tailored solutions, explore our practical guide on custom transportation software development.

You matter. What you want and what works best for you matters.

What does software for logistics management look like?

Let’s review a logistics management solution for a hypothetical transportation company.

A carrier company wants an application to go in lock step with the whole process of transportation and delivery, starting from the order placement and finishing with receiving feedback from the customer upon delivery completion.

Software application users are:

Customers and drivers prefer using the application on their mobile phones. The manager and dispatcher use it in the office on a desktop or PC.

Considering all the above factors, it is possible to suggest a cloud-based solution that interacts with mobile applications for the customer and driver and a web-based application for the office personnel.

Schematicallсy, the desired logistics software can be pictured like below:

What software do logistics companies use?

In 2023, a logistics system must be:

It must be based on the newest technologies to meet the needs of continuous process improvement. Upgrades might be required for products that were released several years ago.

Key logistics management software features include: 

Logistics companies continue investing heavily in cloud-based software. On-premise solutions are rare. Cloud apps ensure equal, 24/7 access to the data for distributed teams and departments.

Software developers maintain, update, and upgrade cloud solutions in the background and with minimum impact on the company’s routine. All that end workers must do is refresh the page.

Automated logistics management software (ALMS) is used for optimization and increased efficiency. Companies look for solutions that enable them to introduce new business models, increase agility, and ensure automated operations at scale.

ALMS helps scale operations. Repetitive tasks are automated. This addresses labor shortage more effectively.

Predictions: warehouse automation market will surpass $41B by 2027.

Real-time transportation visibility is the key priority for shippers and service providers. It becomes a customer expectation rather than a wish, according to a Gartner study. Problems exist that companies and their customers have little information on the shipment status once it leaves a warehouse.

Real-time tracking decreases risks and uncertainties. Customer services become transparent and predictable.

98% of business executives find it important to increase data analysis within the next 1 – 3 years.

Among other things, logistics planning software using Big Data enables logistics providers to improve last-mile deliveries, optimize costs, and eliminate unnecessary losses. Companies investing in quality information coming from various sources produce meaningful insights.

AI augments the capabilities of analytics team. In its McKinsey estimates, McKinsey estimates the potential economic value of AI between $17T and $26T. AI analyzes previously collected data and refines predictions and forecasts based on identified recurring patterns. It helps control processes, determine staffing needs, increase revenue, and more.

Driving factors behind the constant use of all available logistics management software features:

A well-executed logistics management system ensures the following benefits:

Cost saving is the top benefit. For instance, industrial suppliers can double their profits through optimization, thus reducing supply chain costs from 9% to 4%. The software helps them calculate optimum routes, ensure maximum vehicle loads, and minimize inventory holding time.

Real-time tracking decreases supply chain management risks. Businesses receive an overview of shipments, inventory, and supply chain performance. Nothing gets lost. Yet, 62% of companies provide limited visibility. 15% provide nothing.

But contrary to their actions, 82% believe visibility is of big importance.

Businesses must reconsider their supply chains to adapt to ongoing disruptions. As an example, to decrease risks, 29% of Shopify Plus merchants receive products from several suppliers. Among other activities, 35% of brands are looking to digitize manual processes across supply chains by implementing inventory management software, scanning apps, and more.

Logistics software programs boost the bottom line in several ways. They help businesses determine the best distribution center and shipment route, thus improving services. Companies can react more efficiently to specific, seasonal demands. Eventually, workforce management improves due to accurate shift planning and balancing.

75% of suppliers believe the supply chain is the key factor to the quality of provided customer services. For example, B2B order management software for food manufacturers enhances order visibility by providing information to their customers on shipment costs, specific delivery details, available items, and more. Client loyalty increases.

Each logistics company makes its own choice in the dilemma of off-the-shelf vs. custom logistics management software.

Many are comfortable purchasing an off-the-shelf solution. Yet, ready-for-use solutions might be limited, falling behind a company’s growing needs.

The top driving factors for custom logistics development are: 

In its turn, custom logistics management software ensures:

Do you want to do anything differently from your competitors? You might be unable to achieve this using off-the-shelf software. Instead, custom software meets your unique rules and processes. You update software flexibly when those change.

Custom software adapts better to a company’s specific needs. It does not slow down when the number of shipped items and their variety grows. Or when the number of users working in the system increases. Software is better prepared to handle seasonal spikes.

Companies depend on third-party policies when using off-the-shelf modules. They have little influence on product development. A company retains full control over the collected data and product evolution when it makes its software.

Logistics companies use several solutions and databases for their activities. Data flows and integrations can prepare challenges when systems by different vendors must exchange information. Custom solutions can be adapted quickly.

Support is limited and slow in the free and least inexpensive plans, while vendors charge extra for premium support services. Hence, support costs might skyrocket for a yet-small-but-growing business that needs constant, urgent fine-tuning.

The best time to fine-tune your software system is now.

Logistics is a large and dynamic global industry that is very receptive to technical innovations. It adapts such technologies as operational scalability, big data processing, and AI. And we are not talking about drones and robots!

To make all these factors work for your company, you need the essential foundation:

Logistics management software. 

Modern programming technologies allow the creation of functional software applications with extensive data processing, as logistics requires. At the same time, it provides a clear and intuitive interface optimizing work for the end users.

IT Craft specializes in providing custom software solutions for businesses. There are logistics companies among our many happy clients. We provide them with up-to-date logistics software tailored to their specific needs, combining user demands from one side and industry standards from the other side.

IT Craft: the Swiss Army Blade of IT Solutions