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What Is Shipping Logistics? A Short Guide to Shipping
Shipping Logistics: Definition, Best Practices & Guide
Introduction
We won’t sugar-coat things. No other business process is as sorely overlooked as shipping logistics. After all, it is the step where you finally reach what should be your main goal – to deliver one of your products to a customer. So, why do we take shipping logistics for granted?
If you’re in business, you’ll probably know that shipping logistics is actually a really intricate process. In fact, you could go as far as to say that it is a process that contains dozens of different micro-processes within it.
So, what is freight logistics exactly? How many different things does it involve? And what influence does it have on your business?
In this article, we’ll explain everything there is to know about freight shipping logistics. From providing you with a succinct definition of logistics to breaking down the difference between logistics and transportation, we’ll unveil all the ins and outs of freight logistics.
Key points
- Logistics vs transportation – are they the same thing? Not really – transportation refers merely to the movement of goods, while logistics involves processes like packing or handling.
- We can differentiate between three different kinds of shipping and logistics – outbound logistics, inbound logistics and reverse logistics.
- Technological advances have drastically changed the way we do logistics in recent years. Thanks to automation, logistics has become far faster and more efficient than ever before.
- Fulfilment companies have made use of these technological advances to implement four recommended practices – reliance on automation, prioritising flexibility, being scalable and offering real-time visibility.
What is shipping logistics? A plain-and-simple definition of logistics
When we talk about shipping logistics, we aren’t talking about just one thing. In fact, we’re talking about every little logistics-related process (both inbound and outbound) in your supply chain.
In a nutshell, shipping logistics refers to the operation by which a product is taken from one of your warehouses and handed to one of your customers.
Another way of putting it would be to say that it’s the transportation of a product from point A to point B. The word “shipping” makes reference to the movement itself, while “logistics'' involves the processes that affect such movement.
Simple, right? Well, not quite. The truth is that shipping logistics is highly complex. To start with, there are many different types of logistics.
Let’s see what they are.
The 3 different types of shipping logistics
We’ve mentioned that shipping logistics is basically all about getting a product from point A to point B. The thing is that point A and point B can mean a lot of different things. For example, there are instances in which your company’s fulfilment centre might be that point B. And there might be instances where it is your customer.
With this in mind, we have broken down shipping logistics into three different types:
- Outbound logistics
The first type of shipping logistics is the one you were probably thinking of when clicking on this article: outbound logistics. This means the processes by which a finished product is moved from a company’s fulfilment centre or warehouse to a customer’s address.
As you might know, outbound logistics is the bread and butter of online retail. Any company trying to make money out of selling products online relies heavily on it to ensure that the sale ends with a happy customer with a shiny new product in their hands.
These are some of the main order management processes that fall under outbound logistics:
- Warehouse management involves the supervision of all the day-to-day operations required to ensure that products are stored and organised in the right conditions.
- Inventory management is the process of storing and ordering a series of products so that it becomes easier to pick, pack and deliver orders.
- Shipping and delivery refer to the transportation of products from the seller to the buyer, usually through roadway, rail, air, sea – or a combination of some of them.
- Inbound logistics
As we’ve just seen, outbound logistics refers to the processes by which goods are delivered to a buyer from a seller. For that to happen, the seller has to have acquired the goods previously. And that is where inbound logistics come in.
In a nutshell, inbound logistics involves the sourcing, purchasing, transportation and management of products bought by a company from a supplier. It encompasses processes such as inventory calculations, bulk orders and transportation management, as well as storing, tracking and material handling.
Inbound logistics varies drastically from industry to industry. For example, a company that sells soft drinks will need to make certain considerations when transporting goods to its warehouse – such as ensuring that the products are kept at a certain temperature.
Generally speaking, we can identify the following processes within inbound logistics:
- Sourcing and procurement encompass all the necessary steps to acquire products, from evaluating potential suppliers to negotiating quotes and deliveries.
- Inventory management. In inbound logistics, inventory management refers to the research undertaken to figure out how much stock the company should purchase.
- Purchasing is synonymous with acquiring stock.
- Transportation: the means of transport by which the stock is carried from the supplier to the company.
- Reception refers to the handling of the arrival of the stock – for example, unloading a truck falls under this process.
- Storing is synonymous with warehousing, and it involves keeping the stock in adequate condition until it is sold.
- Packing: certain companies acquire unbranded stock to then pack it in branded packaging.
- Tracking ensures that the products are in the right place and condition.
- Reverse logistics
Last but not least, we’ve got reverse logistics. But what is the definition of logistics in this sense? Basically, reverse logistics involves the processes by which products are returned or exchanged. These include things such as creating and printing return labels, surveying returned stock, processing refunds or sending out new products.
Reverse logistics can be seen as a combination of both inbound and outbound logistics. We can differentiate between two different types of reverse logistics:
- Stockist-supplier logistics involves the return of defective or unsold stock to the supplier from the seller.
- Stockist-customer logistics involves the return of a defective or unwanted item from a customer to a stockist.
Now that we’ve gone through the main types of shipping logistics, it’s time to review a few recommended practices that every company should follow.
Four recommended practices in shipping and logistics
Like many other industries, shipping and logistics have been drastically transformed by recent technological advances. From automated stock counts to real-time updates of your product’s location, technology has made logistics more efficient than it ever has been.
However, not all fulfilment companies are taking note. Unfortunately, some of them are still stuck in the old ways. They rely on centuries-old processes that are not only slow and inefficient but also expensive. And who ends up footing the bill? More often than not, it’s the stockists that work with them.
So, if you’re on the lookout for a full-service fulfilment company, make sure that your chosen partner has realised that we’re living in the 21st century. How do you do that? By asking if they follow all of the following recommended practices:
- Save time through automation
In the past few years, everyone and their dog have been telling us that automation is the future. Well, they’re wrong. Automation is the present.
Speaking of old adages, you might have also heard this one – time is money. As it turns out, this one’s true. In the shipping and logistics sector, being fast and efficient pays off. That is why any fulfilment company that prides itself on being efficient must have established a wide array of automated processes to help them save dozens of hours every week.
But automation in itself is not enough. If you really want your automated processes to be as efficient as possible, you need something else. And that something is called connection – or, as we say in the shopping and logistics world, integration.
Basically, integration means connecting your sales channels (for instance, Shopify) with your order fulfilment software. This ensures that every single order is fulfilled quickly and smoothly. Even better, it allows you to automate things like stock counts or inventory reviews – which makes shipping and logistics a lot cheaper.
- Prioritise flexibility
Unfortunately, there are a few fulfilment companies out there that want to stifle you with long-term contracts that you can’t leave. This can have disastrous consequences for your company. For example, let’s say that your fulfilment partner has messed up some of your orders. In turn, this has made a few good clients of yours leave you for a competitor.
But even if your company is haemorrhaging money, you won’t be able to look for a different fulfilment partner. Not ideal, right?
To avoid this from happening to you, always go with a fulfilment partner that doesn’t require you to sign a years-long contract. That way, you’ll have an easy way out if things aren’t working out as they should.
- Don’t forget to scale up (or down)!
You don’t need us to tell you that an eCommerce company’s sales can fluctuate wildly. One quarter, your new soft drink might be the talk of the town, headlining the drinks menu in pubs and restaurants all over the world.
And then, the next quarter, the complete opposite might happen. What used to be your best-selling product has become one of your least popular.
The thing is, fashion and trends are always changing. That’s not a bad thing! After all, it allows companies to design and sell new products. But unpredictability is something that you need to keep in mind when designing a long-term business plan.
Say, for example, that your brand gets an unexpected shoutout from an influencer. Suddenly, you’re expanding way faster than you thought you would – so much so that you can’t fulfil your orders anymore. The result? That your growth will be stifled and your sales reduced.
You can’t avoid the market’s unpredictability. However, you can be prepared for it. How? By partnering with a full-fledged fulfilment company that allows you to scale up and down as your business goals fluctuate.
That way, you’ll be ready for both unexpected growth spurts and sudden slow periods.
- Remember that real-time visibility comes first
Last but not least, we’ve got one of the most overlooked aspects of shipping and logistics – visibility. When we talk about visibility, we’re referring to something very simple. And that is knowing where your stock is at all times, whether it is on its way to a customer or sitting in your warehouse.
But why is visibility so important, and what is freight logistics’ relationship with visibility? In a nutshell, visibility matters because modern supply chains are extremely complex. In most cases, companies have their stock spread out across several warehouses. To make things trickier, they might even work with a bunch of different couriers.
Because of this, modern logistics requires you to have a holistic view of your supply chain that is updated in real time. That way, your order fulfilment will be faster and more efficient, in turn allowing you to be even more competitive.
Take your business to the next level with Bezos
Are you thinking about expanding your business? Do you think it’s time to let the rest of the world know how amazing your products are?
In that case, you want a flexible and trustworthy full-service logistics solutions company that makes order fulfilment a breeze. And that is Bezos.
With an impressive array of distribution centres in the UK and an arsenal of fulfilment centres throughout 16 other nations, we’re more than ready to give your eCommerce business the boost it needs.
Best of all, our holistic, flexible and automated services will make your order fulfilment more efficient than it’s ever been. And if you’ve got any special requests, all you have to do is ask – we’re more than happy to tailor our services to your needs.
And there’s more. As order fulfilment experts, we know that unexpected issues will always come up. But at Bezos, we believe in transparency and visibility – which is why we provide end-to-end order tracking and offer a guaranteed two-hour response time to all tickets. And that’s paired with proprietary order fulfilment software!
And all with no long-term contracts! If this sounds right up your alley, don’t waste any more time and get in touch today to speak to one of our savings experts.
FAQs
What is the difference between logistics and transportation?
Logistics vs transportation – are they the same thing? Not quite – transportation refers to the movement of goods from point A to point B, whereas logistics involves processes that don’t have anything to do with movement (such as storage, packing or handling).
What does logistics mean?
Logistics is the process of planning, coordinating and managing products so that they are transported to their final destination. In a nutshell, it’s everything you do to take your products to your customers.
What are the different types of logistics?
We can differentiate between three different types of logistics. These are outbound logistics (from stockist to customer), inbound logistics (from supplier to stockist) and reverse logistics (returns).
What are the 4 main types of freight shipping logistics?
We can break down shipping logistics depending on the mode of transport used. The four main types of freight shipping logistics are ground (road), rail, ocean and air.
