There is a common misconception among people that both shipping and logistics management are the same and are therefore, used interchangeably many times. Both services are intertwined when it comes to the support of a freight shipment or the logistics behind specialty handling and material management but there are notable differences between the two.
While both are about planning, executing and controlling the entire shipment process, 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. 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.
Let’s take a look at the difference between logistics and shipping, and why it is important that your solutions provider has integrated processes.
What is Shipping?
It is understandable why there is some confusion when referring to shipping. When you buy something on the internet, you see the term when discussing delivery charges. We also use it when referring to several ships collectively. But the sense used within the shipping and logistics industry is when talking about the process of getting goods from one place to another.
In essence, the difference between shipping and logistics can be summed up by movement. Shipping is the physical transportation of the shipment. While this may seem simple, there are actually many different types of shipping methods that are needed, based on what the air or ground transportation unit needs to move. Goods are either transported through air, road or water. The modes of shipping may vary depending upon the type of goods being transported.
The term shipping has become more and more significant given our increasing reliance on home deliveries. Companies like Amazon are just one small aspect of modern shipping. Along with most people’s favorite, next-day delivery, shipping also includes specified materials that are hazardous if not transported correctly, known as hazmat shipping. Hazmat shipping is the preferred mode of shipping if the goods are dangerous or contain potentially hazardous material. Expedited shipping is the best shipping method if the goods need to be delivered quickly.
Common types of shipping methods are completed with:
- Dedicated carrier networks
- Full Truckload (FTL) Shipping
- First mile and final mile transport
- Inside delivery and placement
- Uncrating and debris removal
- Specialty transport (hazmat, high-value, expedited)
What is Logistics?
Shipping is more concise and closed, whereas Logistics is a broad and complex process specializing in different aspects of transportation, which also includes shipping. Logistics involves shipping and can also involve where to store goods before and after they reach their destination. It can include handling as well as packing. With this in mind, the scope and scale of logistics are huge. In short, Logistics is an end to end process which involves other activities like production, handling, warehousing, packaging, labelling, forwarding, and more.
Due to the many moving pieces within logistics, it’s easy to see why this is one of the most important aspects of any business. Understanding the logistics process will help ensure profitability and keep waste to a minimum. Get it wrong with an inefficient, slow, and disjointed strategy, and your company could find itself hemorrhaging money without clearly seeing the source of your losses.
Most transportation begins with logistics planning and procedures, regardless of the industry needing services. However, the exact type of logistics can vary for each individual project.
Common types of logistics processes include:
- Product acquisition
- Material handling
- Warehousing/storage
- Databasing
- Light assembly, display
- Packaging, overwrapping, commingling
- Freight forwarding
- Tax, tariff management
- Transportation tracking
What is the Difference Between Shipping and Logistics?
The primary differences between shipping and logistics are scope and scale. Logistics operates on a significantly larger scale than shipping. In fact, logistics is an important part of supply chain management which is an integral aspect of business strategy. Despite the differences between shipping and logistics, successful businesses rely on both of these areas working together in order to operate efficiently.
As we can see, Logistics is the management and monitoring of materials, products, equipment and any other good that may need to be processed and transferred from one point to another. Shipping ultimately falls under the logistics umbrella as a part of the larger specialty.
Shipping is the act of physically transporting goods or materials between locations. Logistics, on the other hand, is the process of managing an intricate operation.
Logistics is used in a vast array of industries, not just the shipping industry. Hospitals rely on logistics to move patients to different rooms and floors based on their care requirements. And food delivery services rely on logistics to get meals to customers promptly.
To Recap: Shipping is the transportation of goods. Shipping logistics is all of the processes involved in successfully transporting goods. And Logistics is a broader term referring to the management of any complex procedure.
Why is Logistics Important?
Logistics are important to businesses both large and small because shipping and shipping expenses can make up a significant percentage of their bottom line. An effective and streamlined logistic management system can also increase sales and profits by improving distribution efficiency, delivery accuracy and customer support.
The right shipping management solution will also help improve inventory control by enabling better forecasting of demand so that shipping resources can be allocated to meet the needs of customers with less need for carrying excess inventory.
Logistics also help reduce waste and ensure compliance with government regulations, making it easier for companies to deliver goods in a timely manner while staying within budget.
With the right plan in place, logistics management is much more efficient at providing visibility into all aspects of warehousing and shipping operations. Managers can have control over operational costs like product distribution mapping, real time routing data and tracking, order fulfillment rates or supply chain metrics related to sustainability and automation.
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Generate Positive Business Outcomes
With the right logistics, the back-end operations of your business will seem effortless. Efficient logistics will take care of the business roots, transportation measures, item locations, and other such services. It will present a strategy that will help coordinate the business goals with your distribution or transportation partners.
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Added Value For Your Business
Apart from generating positive results, logistics also helps you add value to the services that you offer to the customers. You will eventually be able to make your business products easily available for the customers.
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Better Warehouse Management
The way you handle your logistics will reflect upon the productivity of your warehouse management. You need to plan upon the logistics strategy based upon the goods that you deal with. With logistics services, you will be able to identify weak and vulnerable points to work upon it for better business outcomes.
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Improve Your Customer Loyalty Aspects
With logistics, you can eventually track on the loose ends of your supply chain and work them out to ensure that your potential customers return to you for multiple purchases.
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Faster Product Delivery & Tracking It
With an ideal logistics strategy, the customers can be sent the tracking information and other details to let them stay prepared with the delivery expectations.
The FLEX Logistics Team is Here to Help!
The experts at FLEX Logistics are constantly learning and researching for the most advanced technologies that help us create better products. Whether we’re storing, transporting, or delivering your goods, we always treat your items with the care and respect they deserve.
Contact FLEX Logistics to learn more about our 3PL warehousing solutions and value-added services. Our team understands the importance of getting your products to the market. That is why we aim to understand your business and build lasting relationships with you and your team. Whether you are looking to add a new warehouse to your existing operations, growing and need to increase your distribution efforts, or starting a new company, FLEX has the solutions to meet your supply chain needs.
Contact us today to discuss your current and future warehousing and logistics needs. We will work together with you to understand your requirements and develop a solution that will set you up for future success.