Companies in the United States alone travel about 5.56 trillion ton-miles of products per year, according to Statista. However, while utilizing shipping logistics, creating the ideal management system is a difficult task. Same-day delivery and free returns, for example, have reduced the margin for mistakes in the logistics business. Small firms, too, require top-tier shipping logistics and supply chain management these days.
In this article, we will discuss the difference between shipping and logistics.
The term “shipment” refers to the item you wish to ship, whereas “logistics” refers to the process of transporting your cargo from its point of origin to its final destination.
The art of transferring commodities, products, and raw materials across great distances with precision is known as shipping logistics. While shipping and logistics are two interchangeable concepts. However, shipping exclusively refers to the movement of goods.
The supply chain encompasses actions such as ordering, purchasing, forwarding, and warehousing, which are all part of logistics.
While product transportation is critical, there are additional elements that firms must consider to ensure that everything runs properly. Shipping logistics also necessitates procurement, storage, and freight transit.
What is shipping logistics:
Shipping Logistics is the process of organizing and controlling the transfer of commodities, products, or raw resources.
The following are some examples of shipping logistics:
- Storage and warehousing
- Packaging and combining
- Routing of shipments
- Calculation of tariffs and customs brokerage
- Freight forwarding and intermodal cargo planning
- Managing breakbulk and ocean freight
- Monitoring of air freight
- Transport management and shipping services
Shipping logistics is a type of logistics, which is distinct from both the phrases shipping and logistics, which can be misleading. Knowing the differences between each of these terms is therefore beneficial.
Shipping is a process of transporting cargo from point A to point B using ships, and it is part of the maritime business.
Various types of ships transport cargo all around the world:
- Tankers transporting oil
- Dry Bulk carriers
- Cargo Carriers in General
- Container Transporters
- gas Transporters
- Offshore Vessels
- Offshore Vessels
- Ro-Ro ships
- Other Ferries/Passenger Ships
Shipping lines run all of these ships for profit. Shipping lines operate many of these ships. On the other hand, many shipowners hire these ships.
These maritime firms might run a liner or tramp service. Container shipping lines carry the majority of the liner industry.
Many shipping companies, including us, operate “shipping services” throughout the world’s numerous trade channels.
The top ten container lines have a combined market share of 82.3 percent in the containerized trade, leaving the other container lines with only 17.7 percent.
The following operations are included in (but not limited to) shipping:
- Booking cargo for particular boats, often weeks or months in advance, and ensuring that freight ordered is scheduled on the correct vessels
- Ensure the shipping of the cargo on the boats that are about to load. Ensure that the stowage planning on the vessel is to maximize vessel loading.
- Ascertain that each loaded container has its VGM.
- Ensure the cargo is loaded and discharged safely by issuing bills of lading and other documents for any Cargo loaded.
Planning, marketing, sales, container department, vessel operations, paperwork, finance, administration, and procurement are just a few of the departments that a typical shipping company or shipping agency office has.
The following are part of the shipping process for each voyage:
- Planning and identifying the most profitable trade routes around the world
- The volume of cargo available on these routes
- The number of ships employed on these routes
- The ports that this service must call to maximize business
- The transit days of freight for a round trip
- The cost per voyage, which also includes operational costs.
- Port costs
- Fuel costs
The management of shipping is an essential aspect of the company. It contributes to the seamless operation of the shipping department. Let’s begin at the beginning of the shipment management process and work our way to the end, discussing each step along the way.
Planning the shipment:
Once the delivery business receives the product, many tasks are required to get completed. Preparing shipping paperwork, identifying the kind of cargo, and preparing the invoice status are all part of the shipment planning process.
Documents to Ship:
The first stage in the planning process is to prepare shipping documentation. Many different forms of shipping paperwork are required for the cargo process to run well. Shipping policy documents, shipping labels, making bills of lading and freight bills, shipping insurance documents, guaranteeing a packing list, and generating business invoice paper are only a few of them.
Types of Shipments:
Once the shipping paperwork is in order, check to see if the kind of shipment is specified, and if it isn’t, double-check that it is (at least for internal purposes). There are fewer chances of inconsistencies, and both sides can retain transparency. Rail, road, air, and sea freight are all examples of shipping kinds.
Invoice Status Preparation:
There is the examination of shipping paperwork, as well as of the type of cargo. It’s necessary to double-check that the payment terms are clear and that if they aren’t, they get noted on the payment paperwork. Always keep an internal ledger in which the invoices for every shipment get accurately listed. Also, to provide clarity and transparency, confirm the same with the customer. If the transaction gets done in part payment or full payment, the invoice status should reflect that. Also, specify if it is expedited shipment, flat rate shipping, or any other pertinent details.
Verification of the shipments:
The paperwork for cargo, as well as the package itself, is always vital. Make sure a packing slip and a packing invoice get included. Make sure there are no anomalies between the products and the papers. Check that the product description, quantity, pricing, and delivery terms are accurate and apparent.
Tracking of the shipments:
Because of technological developments and a surge in its use by the general public, it is now possible to follow every shipment. There is a lot of shipping software out there that can assist you with this. The success of tracking products is often due to automation. By inputting the consignment number, any shipping business may track their goods. All of this is achievable because of a chip or barcode in the shipments. The items’ kind, current status, and projected delivery date are all included in the tracking information. The only thing you’ll need is the tracking number.
The term logistics is said to have originated in the military and was first used to describe troop and equipment mobility in various sectors of military operations.
Logistics refers to the process of transporting goods from a manufacturer’s warehouse, point of origin, mining site, farm, or other location to a receiver’s warehouse, door, or store.
The logistics process begins long before the actual shipping since it entails discussing and settling on delivery timetables acceptable to both the customer and the supplier.
An LSP (Logistics Services Provider) should be able to select the optimum solution for cargo transportation. Cargo gets transported via road, rail, air, and sea, and each method of transport has its unique set of characteristics.
Airfreight is faster than sea freight, but it is also significantly more expensive. Rail freight is more environmentally friendly than road freight and may provide more consistent transit times and schedules. Road freight can provide comprehensive door-to-door service and is one of the more cost-effective modes of transportation.
Logistics is responsible for the design, implementation, and execution of numerous components involving:
- The transportation of freight such as goods
- Tracking, and delivery.
Types of Logistics:
There are three types of Logistics:
- Inbound logistics
- Outbound Logistics
- Reverse Logistics
The process of receiving items from a supplier, producer, or place of origin is known as inbound logistics.
The process of sending items to their final destination is known as outbound logistics (typically the customer).
The process of retrieving returned items from a consumer is known as reverse logistics.
All three forms of logistics employ shipping, and each has its own logistics plan. When a client has to return or exchange a product, businesses receive incoming shipments, send outbound shipments, and receive reverse shipments.
Logistics management is the process of ensuring that customers’ demands are satisfied while planning, implementing, and regulating an efficient flow of commodities.
It’s an essential part of any transportation operation. It considers the time and cost of transporting goods, and it has an impact on many aspects of our life beyond casual shipping.
In a nutshell, shipping is the movement of products by freight. Logistics, on the other hand, is a vast phrase that refers to the complete transportation process.
Importance of Logistics:
Because shipping and shipping costs may account for a considerable portion of a company’s bottom line, logistics is crucial to large and small organizations.
- A company can boost its sales and get profits by:
- enhancing the distribution efficiency
- delivery accuracy
- customer assistance,
- a well-designed
- Well-organized logistic management system.
Shipping efficiency also means less wait for delivery of customers’ items and more responsiveness when customer care issues emerge for firms who operate an eCommerce site.
More efficient shipping results in:
- fuel and freight cost savings
- Lower damage rates for big international corporations with operations all over the world.
The correct shipping management solution may also help with inventory control by:
- Allowing for improved demand forecasting
- Allowing shipping resources to be allocated to clients that don’t require as many goods.
Logistics also aid in waste reduction and government regulatory compliance, making it easier for businesses to deliver items on time and within budget.
Logistics management can provide far better insight into all parts of warehouse and shipping operations with an accurate plan in place. Managers may control product distribution mapping, real-time routing data and tracking, order fulfillment rates, and supply chain KPIs relating to sustainability and automation.
Four types of transportation in Logistics:
Companies may export items using four different modes of logistics transportation.
These are also often known as maritime, road, rail, and air shipments. These are examples of these modes of transportation.
Transport via sea and ocean
Ocean shipping is one of the most common modes of freight transportation since it is one of the most cost-effective and time-effective in the long run! Across seas, ships transport containers containing anything from food to clothing to automobiles and furniture.
Ground transit and trucking
Because it involves carrying items over road and highway systems, trucking is often known as “ground shipping.” Even though trucks consume more gasoline than planes and other types of transportation, trucking remains a preferred mode of transportation for shipping logistics.
Transportation by air
Planes deliver the shipments through numerous airports as part of an air transport service, often known as air freight. Depending on the location of a product, this delivery method might take anywhere from one to three days.
What is the difference between shipping and Logistics:
The act of transferring commodities or resources between sites is known as shipping. On the other hand, logistics refers to the process of overseeing a complex operation.
The act or practice of moving a consignment from one location to another is known as shipping. Shipping is a closed phrase that refers solely to shipping information. Shipment charges, shipping paperwork, shipping kinds, and various other factors are to consider.
On the other hand, logistics is a far more complicated phrase that encompasses a variety of organizations or departments. Whereas cargo is a more specific and closed phrase, logistics is a vast term that includes shipping management.
Not only in shipping, but in a variety of other industries as well. Hospitals rely on logistics to transport patients to different rooms and floors depending on their needs. Food delivery businesses, meanwhile, rely on logistics to send meals to clients as soon as possible.
To summarise, shipping is the process of moving products from one location to another. All of the procedures involved in safely moving products are known to be in shipping logistics. On the other hand, logistics is a phrase that refers to the administration of any complicated operation.
Custom Crating and Logistics can help you increase the efficiency of both your dispatchers and drivers, whether you have a delivery fleet of hundreds of vehicles (or even thousands) or a small-scale local business. Contact us for more information.