Managing the storage and distribution of products is crucial for the company to meet and satisfy customer needs. Delivering within agreed deadlines poses a significant challenge due to the complex logistics processes and the issues within the transportation sector.
Many companies outsource freight or logistics operations services to optimize expenses and maintain focus on their core business. However, it is necessary to know how the modalities work before hiring one of them and understand that logistics is not only about delivering products but also the activities mentioned below:
- Product storage and packaging;
- Freight calculation;
- If you have your fleet, vehicle maintenance and fuel costs,
- Contact the Post Office and /or carriers;
- Movement within the location where it is stored;
- Delivery to the customer;
- Load optimization;
- Route planning;
- Receipt of goods delivered by the supplier;
- Collection and/or exchange at the customer’s home (reverse logistics);
- Troubleshooting delivery-related issues;
These are some of the most common situations, but there may be others that are also directly related to managing e-commerce logistics. Ultimately, the logistics operation is responsible for providing the resources, equipment, and information necessary for executing all of a company’s activities.
In this same scenario, there is the freight issue, but many people confuse the company’s logistics processes with the management and execution of freight. Both activities are the responsibility of the same area, in this case, ‘ Logistics ‘; however, they have differences in scope and scope. One is known for the more comprehensive logistics practice; the other refers to executing and managing transport.
The logistics company in Dubai must be able to manage all its logistics costs, clearly differentiating between freight costs and total logistics costs. Freight costs are made up of all costs incurred in the transportation operation, ranging from vehicle and carrier costs to taxes on transportation operations, tolls, redelivery and return costs, and risk management. Logistics costs, in addition to all transportation costs, also include expenses related to storage and internal handling, packaging and palletizing, and dry port rentals.
Check out the differences between freight and logistics:
When the shipping company contracts the freight forwarder service, the main objective is for the carrier to collect the products at the factory or distribution centre and then deliver them to the end consumers or other company units that will receive the goods.
When opting for a logistics operation, in addition to receiving the freight service, the shipping company also expects the operator to be part of its supply chain, participating in the other phases of the logistics process.
Considering the purpose and responsibility of freight and logistics services, the level of involvement of the carrier with the shipping company is also radically different. In freight, customers can hire multiple companies to perform the same service, and even if there is a close and positive relationship with the supplier, in practice, the supplier does not actively participate in the partner’s day-to-day business.
In logistics operations, since the carrier is part of the customer’s supply chain, its responsibility becomes much more significant: it is an essential partner that, if it does not understand the business strategy, can seriously harm the results. However, as the market becomes more competitive, it is natural that companies will start to demand more and more from carriers and other logistics partners that serve them daily.
It is no different regarding contracting transport and more advanced logistics: the trend is for companies that only collect and distribute products to become increasingly involved in their customers’ processes to differentiate themselves from the competition, offering additional services that bring added value to the process.
In conclusion
Understanding the differences between freight and logistics is crucial for businesses looking to maximize their supply chain efficiency. Freight forwarding refers to the end to end transportation of goods, whereas logistics includes a variety of processes such as storage, inventory management, packaging, and delivery. Cargo business holders should carefully evaluate their needs before deciding to outsource freight services or invest in a comprehensive logistics solution.
With an increasingly competitive market, businesses now more than ever ask logistics companies to do more than move products, deliver strategic value, and facilitate smooth coordination in their supply chain. Good logistics management is cost-saving and enhances customer satisfaction with on-time and dependable delivery. It pays to know the distinction between freight and logistics as companies make efficient and long-term profitable decisions. Last, incorporating sophisticated logistics solutions allows businesses to stay ahead in an ever-evolving marketplace, offering leaner operations and a more significant competitive edge.
